Moscow, Russian Federation — July 23, 2003 — Mobile TeleSystems OJSC (“MTS” — NYSE: MBT), has signed an agreement to acquire 100% of Sibchallenge, a GSM operator in the Krasnoyarsk region of Russia.

In line with MTS’ strategy of expanding its footprint into the more attractive regions of Russia, the Company has signed an agreement to acquire 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. Krasnoyarsk has a population of 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 currently does not have licenses to provide mobile services in the Krasnoyarsk region.

Sibchallenge has a subscriber base of approximately 130,000 (GSM — 123,000, DAMPS — 7,000) users and around 40% market share as of 30 June 2003, according to sotovik.ru. At present, the company operates 106 base stations and two switching centers. Its network covers the main cities and centers of the Krasnoyarsk region, such as Krasnoyarsk, Norilsk, Achinsk, Minusinsk, and Dudinka in the Taymyr region.

Sibchallenge’s average monthly revenue per user (ARPU) was $21 in 2002 and $20 in the first quarter of 2003. The company’s net debt is at $9.4 million.

Commenting on the acquisition of Sibchallenge, Mikhail Smirnov, President of MTS said: “The acquisition of Sibchallenge provides MTS with a unique opportunity to expand its operations into one of the key regions of the Siberian part of Russia. We are acquiring a company in an industrially developed market, which has potential. This is another step towards strengthening our position in Siberia.”.

If the transaction is completed the Krasnoyarsk region will become the 59th region for which the Company has a GSM licence. The acquisition of Sibchallenge will increase the total number of MTS? license footprint to 172.2 million people (of which 113.2 million are in Russia, 49 million are in Ukraine, and 10 million are in Belarus).

Completion of the transaction is subject to a number of conditions. No assurance can be given that the transactions will be completed on the terms and conditions described, or at all.

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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

Gavin Anderson & Company, London
Halldor Larusson
tel: +44 (0) 20 7554 1400