MTS reports that Bitel's offices were seized by an unidentified group of people earlier in the day. Under these circumstances, the company was unable to provide mobile phone services to its customers in the Kyrgyz Republic. After a series of meetings by Vassily Sidorov, MTS' President and CEO, with top officials of the Kyrgyz Republic including the President, the Prime Minister and the Speaker of the Parliament, the network was able to resume its operations, however some of our offices remain seized.

Bitel is a mobile operator holding a GSM-900/1800 license for the entire territory of the Kyrgyz Republic. As announced on December 12, 2005, MTS acquired a 51% stake in Bitel. Bitel is the only GSM operator in the country and services approximately 90% of the country's subscribers.

We note that the seizure of Bitel may have been carried out in connection with a court ruling in favor of a third party recognizing their rights to the shares of Bitel.

MTS will take all appropriate measures to defend its interests in international and foreign courts.

MTS entered the Kyrgyz Republic as a strategic investor. The Company plans to invest in the economy of the Kyrgyz Republic and to develop a first rate telecommunications infrastructure.

Mobile TeleSystems OJSC ("MTS") is the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, the Company services over 54.1 million subscribers. The regions of Russia, as well as Belarus, Turkmenistan, Kyrgyzstan, Ukraine, and Uzbekistan, in which MTS and its subsidiaries are licensed to provide GSM services, have a total population of approximately 238.2 million. Since June 2000, MTS' Level 3 ADRs 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.

Tarino Limited's ownership of Bitel is currently the subject of on-going litigation in Kyrgyzstan, the British Virgin Islands and the United Kingdom. In the event that any of these claims are resolved against Tarino Limited, as the most negative outcome, MTS may potentially lose its ownership interest in Bitel. Should this occur, MTS' business, prospects and results of operations could be materially adversely affected.

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