Mr. Alexander Tkachev, Governor of the Krasnodar region, and Mikhail Shamolin, President and CEO of MTS, today signed a memorandum of understanding and partnership. Under the terms of the partnership, MTS will participate in a number of social responsibility and investment projects in the region. These projects include development of telecommunications infrastructure in Sochi for the XXII Olympic Winter Games in 2014, build up of fiber optic networks in the region and launch of 3G networks.

The Krasnodar region is one of the most prominent federal districts in Russia in terms of economic development and growth. MTS is the leading mobile operator in the region with around four and a half million subscribers as of the second quarter of 2008. MTS is one of the biggest investors in the region, with plans to invest over seven billion roubles in the development of telecommunications infrastructure, including 3G networks, during 2008-2010.

As part of its investment program, MTS is planning to lay around 300km of fiber optic cable on the bed of the Black Sea to connect key cities on its shores. In addition, the Company will develop a Transcaucasian fiber optic network that will connect Krasnodar region with all the federal subjects of the Russian Federation in North Caucasus.

MTS became the first operator to launch a 3G network in the Krasnodar region, announcing network readiness in Sochi in May 2008. The Company plans to further build out its 3G network in the region during 2008, bringing the network to such cities as Krasnodar, Anapa, Novorossiysk, Tuapse and Gelendzhik.

In partnership with the administration of the Krasnodar region and the organizers of the VII International Investment Forum Sochi-2008, MTS will demonstrate the capabilities of its 3G network through the “Forum on a Palm” project. This unique project allows real-time video streaming of all Forum events to 3G-enabled mobile devices on MTS’ 3G network.

In light with the Company’s social responsibility program, MTS will bring a unique “Pobedniy” (“Victorious”) tariff to all members of the armed forces and students of military academies in the Krasnodar region. In partnership with the Russian Olympic Committee, MTS is planning to provide multi-faceted support to athletes that represent Krasnodar region in the Russian national teams and to regional table tennis and volleyball federations.

“I am confident that our partnership with MTS will stand out as an example of successful collaboration between government and businesses to boost regional social and economic development,” said Alexander Tkachev, Governor of Krasnodar region.

“MTS services around four and a half million subscribers in the Krasnodar region. As a socially responsible company, we are committed not only to advancing technological development of the markets we operate in, but also to actively participate in projects focused on social development,” noted Mikhail Shamolin, President and CEO of MTS.