Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” or the “Company” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that MTS subsidiaries have completed the acquisition of a 100% stake in CJSC Sistema-Inventure (“Sistema-Inventure”), which directly owns 29% of the ordinary shares of Moscow City Telephone Network (“MGTS”). Sistema-Inventure was acquired from JSFC Sistema (“Sistema”) in accordance with the terms of indicative offer that were announced on September 06, 2011.

In accordance with the terms of the transaction, subsidiaries of MTS have acquired 100% stake in Sistema-Inventure, which directly owns 29% of the ordinary shares of MGTS, for RUB 10.56 billion. In addition to its stake in MGTS, Sistema-Inventure has RUB 10.41 billion¹ of debt owed to Sistema, and it was agreed that as a part of the transaction MTS will repay the debt by the end of 2011. Upon completion of the transaction MTS’ ownership stake in MGTS (direct and indirect) will have increased to 99.1% of ordinary shares and 69.7% of preferred shares, which overall total 94.1% of MGTS charter capital.

MTS subsidiaries have received all necessary regulatory approvals to complete the transaction. The approval of the acquisition of Sistema-Inventure by the MTS Board of Directors was based on the recommendation of the Special Committee to the Board of Directors, which consists of the three independent directors who serve on the Board of Directors. The Special Committee was established to oversee the transaction process and decide whether to recommend the acquisition to the full Board of Directors. A fairness opinion was provided to the Special Committee by an independent financial advisor, Citigroup Global Markets Limited. Cleary Gottlieb Steen & Hamilton served as legal advisor on the transaction, while Ernst & Young provided advice and analysis of the commercial, tax and financial aspects of the transaction.