Moscow, Russian Federation – October 14, 2003 – Mobile TeleSystems OJSC (“MTS” - NYSE: MBT), the largest mobile phone operator in Russia, today announces that it has completed previously announced transactions to acquire stakes in three regional companies –Volgograd Mobile, Astrakhan Mobile, and Mar Mobile GSM.
As part of a series of previously announced transactions with MCT Corporation (see press release dated August 12, 2003), MTS has completed the acquisition of ownership stakes in three companies in the different regions of the Volga and South parts of Russia. MTS has acquired:
- a 50% stake in Volgograd Mobile, a cellular operator in the Volgograd region;
- a 50% stake in Astrakhan Mobile, a cellular operator in theAstrakhanregion, and
- an 80% stake in Mar Mobile GSM, a GSM-license holder in the Mari El Republic.
Also, in a separate transaction MTS has completed the acquisition of the remaining 20% stake in Mar Mobile GSM from existing shareholders unrelated to MCT Corporation, thus consolidating a 100% ownership in the company.
Volgograd Mobileholds a GSM 1800 license for the Volgograd region of Russia. The region’s population is 2.7million and the company’s subscriber base as of June 30, 2003 was approximately 4,600.
Astrakhan Mobileholds a GSM 1800 license for the Astrakhan region with a population of
1million. The company’s subscriber base as of June 30, 2003 was approximately 7,100.
Mar Mobile GSMholds a GSM 1800 license for the Republic of Mary El, with a population of 730,000. The company is not yet operational and has no subscribers.
Prior to this transaction, MTS has had no licenses or operations in these regions. The deal brings the total number of Russian regions under MTS license to 76 (out of 89), and the overall population of the license area to 128.3 million (88% of total). Including operations in Ukraine and MTS’ unconsolidated joint venture in Belarus, MTS’ license portfolio covers a population of 186.3 million.
For further information contact:
Mobile TeleSystems, Moscow
Investor and Public Relations tel: +7095 911 6553
Andrey Braginski e-mail: firstname.lastname@example.org
These materials are not an offer for sale of any securities of MTS in the United States. Securities of MTS may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
This communication is not an offer to any person in the United Kingdom, or an invitation to any person in the United Kingdom to make offers, to purchase any securities. This communication is directed only at (i) persons who are outside the United Kingdom or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (the “Order”) and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as “relevant persons”). Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents. Stabilization/FSA.
This press release is not a public offer or advertisement of securities in the Russian Federation, and is not an offer, or an invitation to make offers, to purchase any securities in the Russian Federation.
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. 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.
As a part of its transaction with MCT Corporation, MTS has also acquired a 43.7% stake in Uraltel, the largest cellular operator in the Sverdlovsk region of Russia and a 50% stake in Primtelefon, which holds a GSM license for the entire Far East region of Russia and certain parts of Siberia. The total purchase price for the stakes in the five companies mentioned above is approximately $70 million. The total net debt of all the companies in which stakes have been acquired is approximately $25 million.
MTS has acquired 20% in Mar Mobile GSM as a part of previously announced transaction with shareholders unrelated to MCT Corporation to acquire 20% of Mar Mobile GSM and another 2.95% of Uraltel for approximately $1 million.