Moscow, July8^th, 2004:  Dr. H. von Pierer, Simens AG Chairman of the Board, and  V. Evtushenkov, Sistema JSFC Chairman of the Board signed the Agreement of strategic partnership and co-operation between Siemens AG and Sistema during the German-Russian conference of Entrepreneurs on July 8^th in which the Russian President  V.Putin and German Chancellor G.Schroeder took participation.

The first Agreement of partnership and co-operation between Siemens AG and Sistema was signed in 1999. The aim of this new agreement is further development and intensification of strategic partnership. The Agreement defines the principles of two companies’ co-operation and main directions in which this partnership will develop: telecommunication and IT technologies, automation techniques, microelectronic, medical technique, power engineering, complex industrial equipment and industrial automation,  transportation techniques,  technique for traffic monitoring and control, household appliances as well as other directions which are of mutual interest for the parties.

The partnership between two companies has been successful in telecommunication during last years. Now Siemens in co-operation with Sistema-Hals CJSC, a property development company, which is part of Sistema group, is erecting new office building for Siemens Russia in Moscow. The corner-stone ceremony took place in September 2003.

The two parties are confident that strengtheningofco-operationbetweenSiemensandSistemawillpromote modern technologies development and contribute to their effective use in different branched of Russian economics as well as to strengthen Russian-German economical relations.

 ***

SIEMENS AG

Siemens (Berlin and Munich) is a global powerhouse in electrical engineering and electronics. The company has more than 417,000 employees working to develop and manufacture products, design and install complex systems and projects, and tailor a wide range of services for individual requirements. Siemens provides innovative technologies and comprehensive know-how to benefit customers in more than 190 countries. Founded more than 150 years ago, the company is active in the areas of Information and Communications, Automation and Control, Power, Transportation, Medical, and Lighting. In fiscal 2003 (ended September 30), Siemens had sales of ?74,2 billion (U.S. GAAP) and net income of ?2.44 billion (U.S. GAAP).

SiemensRussia is active in all traditional spheres of Siemens activity worldwide. Siemens Russia is one of the leading supplier of products, services and complex solutions for modernisation of key branches in Russian economics.  Siemens employs more than 1,500 people in 30 regions across the country. Taking into account enterprises with the company’s share holding Siemens Russia turnover in 2003 year reached  ? 1,000.

Further information is available on: www.siemens.com / www.siemens.ru

“Sistema”

Sistema is one of Russia’s largest diversified holding companies. In 2003, the company reported sales of $3.76bn., with total assets exceeding $6.8bn. Founded in 1993, Sistema currently owns and actively manages a diversified portfolio of assets in the following sectors: telecommunications (Mobile TeleSystems (MTS), Moscow City Telephone Network (MGTS), Comstar United Telesystems and others), technology (Mikron, as well as a number of other microelectronics enterprises), insurance (ROSNO), finance and securities (MBRD), real estate (Sistema-Hals), travel services (Intourist), retail (Detsky Mir) and others. Additional information is available atwww.sistema.ru