The main shareholder of both operators was the British company Cable and Wireless plc ("Cable & Wireless"), which owned 61.4% of STM (through a subsidiary) and 60% of ST. Under the terms of the transaction, STM and ST were to be purchased simultaneously. Further, VimpelCom has undertaken, as the majority shareholder, to ensure that ST repays its debt of US$2.2 million to Cable & Wireless. VimpelCom has intention to sell the 60% of ST in the future.

STM's GSM-1800 and D-AMPS licenses cover a territory with a population of approximately 550,000. According to company estimates, STM's subscriber base at the end of June 2005 was more than 96,000 (including more than 95,500 GSM subscribers), which according to company estimates represented a market share of approximately 45.7% in the Sakhalin region. According to independent estimates, the penetration rate in Sakhalin is approximately 35.5%.

Commenting on today's announcement, Nikolai Pryanishnikov, Executive Vice President - General Director, Regions, VimpelCom, said, "We are very pleased to announce the acquisition of STM which gives us access to operations in an important region of the Far East, where we do not have GSM license".

With the acquisition of STM, VimpelCom is operating in 76 out of 89 subjects of the Russian Federation.

VimpelCom is a leading international provider of telecommunications services, operating under the "Beeline" brand in Russia and Kazakhstan. In addition, VimpelCom is continuing to use the "K-mobile" and "EXCESS" brands in Kazakhstan. The VimpelCom Group's license portfolio covers approximately 94% of Russia's population (136.5 million people), including the City of Moscow, the Moscow Region and the City of St. Petersburg as well as the entire territory of Kazakhstan. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange ("NYSE"). VimpelCom's shares are listed on the NYSE under the symbol "VIP".

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