Moscow, Russia - October 23, 2007 - Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, today announced that it has signed a share purchase agreement for the acquisition of an additional 41% stake in Shyam Telelink Ltd., an Indian telecommunications operator, and a call option agreement which gives Sistema the right to increase its stake in Shyam Telelink Ltd. from 51% up to a maximum of 74%, subject to receiving an approval from the Foreign Investment Promotion Board (FIPB) of India.

Upon acquisition of the additional 41% stake, the overall purchase price is expected to reach US$ 58.1 million. Thereafter, Sistema will have the right to purchase an additional 23% stake in Shyam Telelink Ltd. during 20 months following such an acquisition and pursuant to the call option agreement at the price which will be based on the fair market value of the company at the time of such additional purchase. If such call option is not exercised within 30 months, Sistema will be obligated to pay to the sellers an amount equal to 11.5% of the increase in the fair market value of the company.

In addition, Sistema signed a put option agreement for 51% stake in Shyam Telelink Ltd. for a total price not less than the purchase price of the 51% stake. This put option is exercisable within 12 months following the acquisition of 10% stake in Shyam Telelink Ltd.

The company applied to appropriate state authorities for obtaining unified telecommunication licenses in order to provide fixed-line and cellular services in 21 states of India.  The company intends to start its network expansion if such licenses are granted.

Sistema's acquisition of additional ownership stakes in Shyam Telelink Ltd. is subject to a number of conditions, including the execution of additional documents and obtaining various approvals.