The MTS Board of Directors (BoD) meeting held earlier this week recommended the annual general meeting of shareholders (AGM) approve annual dividends of RUR 5.75 per ordinary MTS share (approximately $1.03 per ADR¹) for the 2004 fiscal year, amounting to a total of RUR 11.47 billion ($409.48 million)². If the dividends are approved, MTS, in accordance with Russian tax legislation, will withhold a tax of up to 15% on the dividend amount when payable, depending on the recipient’s legal status and jurisdiction.

As announced earlier, the record date for the Company’s share- and ADR-holders entitled to participate in the AGM and to receive dividends was set for May 3, 2005. The AGM will be held on June 21, 2005.

¹ According to the Russian Central Bank exchange rate of 28.0 RUR/$ as of May 19, 2005.

² The amount is 75.4% of the Company’s net income in 2004 in accordance with the RAS and 40.0% of net income under US GAAP.

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