Moscow, Russian Federation — August 18, 2006 — Mobile Telesystems OJSC («MTS» — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces signing an amendment to the outstanding option on the remaining 26% stake in Uzdunrobita.

The Company first acquired a 74% stake in Uzdunrobita for $121.0 million from two private companies in August 2004. As was announced at the time of the transaction, MTS also signed a three year put and call agreement with all the existing shareholders of the Uzbek company to purchase the remaining 26% stake for a minimum price of $37.7 million to become the sole owner of the company.

The amendment to the original option agreement eliminates the call option, yet extends the exercise period of the put option to July 14, 2008. The purchase price for the put option will be determined by an international investment bank to be selected jointly by both parties within 10 days of the date of service of a put notice. These changes were made in accordance with the wishes of all sides to maintain and develop a mutually beneficial partnership as demonstrated by the strong results of Uzdunrobita.

Uzdunrobita is the largest mobile phone operator in Uzbekistan with approximately 894.8 thousand subscribers as of July 31, 2006. The company holds GSM licenses for the entire territory of the country.