Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announced the commercial launch of its 3G network in Saint Petersburg and technical readiness of 3G networks for commercial launch in Sochi, Yekaterinburg and Kazan.

Saint Petersburg becomes the first Russian city where MTS launched its next-generation network. The Company plans to launch additional 3G networks in over 10 cities during 2008 and in up to 40 cities in Russia through 2009. MTS also holds 3G licenses in Uzbekistan and Armenia, where the network will be launched as early as 2009. The Company plans to invest around 38 billion roubles (approximately $1.6 billion according to the official exchange rate on May 28, 2008) in 3G network development over the next three years to provide high-speed data transfer services to its customers in Russia and the CIS.

The key benefit of a next-generation network is the ability to provide customers with faster data download speeds with top download capacity using HSPA technology up to 3.6 Mbit/s. This is over ten times faster than the currently available 2G EDGE technology. Higher speeds enable faster download of mobile content and higher quality email services, particularly for work with large attachments. 3G brings true mobile broadband to subscribers of MTS Connect, a proprietary mobile Internet solution from MTS that comes as a modem for desktop PCs or laptops.

MTS also launched a number of innovative services available only through the 3G infrastructure. Customers on the new network are now able to make video calls, access mobile TV and roam on 3G networks. In addition, international roamers are able to access fast speeds and advanced services on MTS’ 3G networks.

“With the launch of 3G networks in major regions of Russia, MTS is starting a new phase in the development of telecommunications in the CIS. We are keen to offer 3G services to our customers, as we see great demand for data and broadband solutions in Russia,” noted Mr. Mikhail Shamolin, CEO of MTS Russia.

Mr. Shamolin continued: “We believe that conditions for the 3G launch in Russia are more favorable than in the developed markets. Today’s HSPA-enabled infrastructure allows download speeds up to 10 times faster than the first phase of 3G networks, while the costs for equipment and devices are significantly cheaper. We have access to best-practice implementation from around the world and our 3G network benefits from higher-quality and more advanced mobile services and devices.”

Development of the 3G network is a cornerstone of MTS’ strategy to provide mobile broadband in the CIS. As the CIS markets demonstrate relatively low levels of fixed-line penetration and historic underinvestment in infrastructure, MTS views its networks as an ideal vehicle to meet the growing broadband Internet needs of its subscribers through attractive data products and services. MTS possesses 3G licenses in Russia, Uzbekistan and Armenia, as well as operating a CDMA-450 network in Ukraine to provide high-speed data access for its clients.