Moscow, Russian Federation — September 1, 2006 — Mobile Telesystems OJSC («MTS» — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces the incorporation of two 100%-owned MTS subsidiaries in Bermuda and in the Netherlands.

The Company has established a subsidiary called Mobile TeleSystems Bermuda Limited in Hamilton, Bermuda, and Mobile TeleSystems  B. V. in Amsterdam, the Netherlands. These companies will be used for future corporate needs.