Moscow, Russian Federation — August 22, 2003 — Mobile TeleSystems OJSC (“MTS” — NYSE: MBT), the largest mobile phone operator in Russia in terms of subscribers, today announces the completion of an earlier-announced transaction to acquire a 100% stake in Sibchallenge, a mobile phone operator in the Krasnoyarsk region of Russia.

MTS has completed the purchase of 100% of Sibchallenge, a cellular operator in the Krasnoyarsk region, for $45.4 million.

Sibchallenge holds licenses to provide GSM 900/1800 and DAMPS mobile services in the Krasnoyarsk region of Siberia, including the Republic of Hakasiya and the Taimyr Autonomous district, all located in the Siberian part of Russia. The population of the three regions is approximately 3 million. Mobile penetration in the region is estimated at approximately 11% as of 30 June 2003, according to sotovik.ru, an independent market research agency. MTS previously had no licenses to provide mobile services in the Krasnoyarsk region. The acquisition increases the number of regions under the license to 61¹ and the population under the license to 172.2 million.

Sibchallenge has a subscriber base of approximately 130,000 users (GSM — 123,000, DAMPS — 7,000) and around 40% market share as of 30 June 2003, according to sotovik.ru. The company’s net debt is $9.4 million.

¹ The previously announced acquisition of Primtelephone, Volgograd Mobile, Astrakhan Mobile and Mar Mobile is subject to a number of conditions. No assurance can be given that the transactions will be completed at all. In the event the deal is successfully completed, the number of MTS license regions will increase to 75, and the license portfolio will cover a population of 186.3 million.

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Mobile TeleSystems OJSC (or “MTS”) is the largest mobile phone operator in Russia and Eastern Europe in terms of the number of subscribers. Together with its subsidiaries, the Company services over 12.8 million subscribers. MTS and its subsidiaries are licensed to provide GSM services in 61 regions of Russia, in the Ukraine and in Belarus, which together have a total population of approximately 172.7 million. Since June 2000, MTS’ shares have been listed on the New York Stock Exchange with the ticker symbol MBT. Additional information about MTS can be found on MTS’ website at www.mtsgsm.com.

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Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. We refer you to the documents MTS files from time to time with the U. S. Securities and Exchange Commission, specifically, the Company’s most recent Form 20-F, as amended. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors,” that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures; rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.

For further information contact:

Mobile TeleSystems, Moscow
Andrey Braginski, Investor and Public Relations
tel: +7 (095) 911-65-53e-mail: ir@mts.ru