Delivery of the equipment will be in phases scheduled for completion in the second quarter of 2005.

Deployment of these networks will considerably increase MTS' presence in the Volga and Southern regions of Russia. Alcatel will also deliver its Open Services Platform (OSP) that will be installed in MTS' networks in the North-West, Urals, Volga and Southern regions of Russia. Alcatel will supply MTS with its Evolium? GSM/GPRS end-to-end solutions, including Base Stations Sub-systems (BSS) and Mobile Switching Centers (NSS) that will be used to deploy new MTS networks in the Astrakhanskaya, Volgogradskaya and Ulyanovskaya oblasts, the Mari El, Chuvashskaya, Mordovia, Dagestan, Kabardino-Balkarskaya, Karachaevo-Cherkesskaya and North Osetia-Alania republics and Stavropolsky krai.

Vassily Sidorov, President and CEO of MTS commented: "Alcatel's solutions were chosen after extensive evaluation of other vendors' proposals. We have partnered with Alcatel on several projects already and are confident that their technologies, combined with their understanding of our local needs and realities, will enable us to successfully implement this project".

Marc Rouanne, Chief Operating Officer of Alcatel's mobile activities added, "Alcatel understands that the operator's need for appropriate network capacity is a key factor for successful development, together with on-time introduction of new differentiating services. The embedded multi-standard capability of the Alcatel Evolium? solution will allow for MTS's potential network and services evolution. This new project confirms Alcatel's commitment to the Russian market and will strengthen our partnership with MTS".

About MTS

Mobile TeleSystems OJSC (or "MTS") is the largest mobile phone operator in Russia and Ukraine in terms of subscribers. Together with its subsidiaries, the company services over 20 million subscribers. The regions of Russia as well as in Belarus and Ukraine in which MTS and its subsidiaries are licensed to provide GSM services have a total population of approximately 200.6 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.

About Alcatel

Alcatel provides communications solutions to telecommunication carriers, Internet service providers and enterprises for delivery of voice, data and video applications to their customers or to their employees. Alcatel leverages its leading position in fixed and mobile broadband networks, applications and services to bring value to its customers in the framework of a broadband world. With sales of EURO 12.5 billion in 2003, Alcatel operates in more than 130 countries.

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