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Mobile TeleSystems

January 24, 2011

Consent solicitation on the Notes due in 2020

Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS”, “the Company” or the “Guarantor” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that MTS International Funding Limited1 (the “Issuer”), at the request of the Company, has commenced a consent solicitation in respect of its senior unsecured USD-denominated Eurobonds in the amount of $750 million with an annual interest rate of 8.625% and maturity in June 2020 (the “Notes”). The early instruction deadline for submission of electronic voting instructions is 3.00 p.m. (London time) on February 9, 2011. The final voting deadline for submission of electronic voting instructions is 3:00 p.m. (London time) on February 11, 2011.

The purpose of the consent solicitation is to obtain the consent of Noteholders (1) to waive the provision of Clauses 11.1.11 and 11.1.5 of the Loan Agreement with respect to an Event of Default or any other Event of Default which might arise under any and all provisions of the Loan Agreement as a result of an arbitral award (the “Award”) in favor of Nomihold Securities Inc. (“Nomihold”) against Mobile TeleSystems Finance S.A. (“MTS Finance”), a Luxembourg subsidiary of MTS, and (2) to modify the Loan Agreement to avoid a future Event of Default arising as a result of the Award.

The terms and conditions of the Consent Solicitation are set out in the Consent Solicitation Statement issued by the Issuer dated January 24, 2011 (the “Consent Solicitation Statement”) and capitalised terms used in this press release but not defined herein have the meanings ascribed to them in the Consent Solicitation Statement.

If the Extraordinary Resolution is passed and all of the conditions to the Consent Solicitation Statement have been satisfied or waived, the Issuer will pay, or procure the payment of (a) an early instruction fee for those Noteholders who vote in favor of the Extraordinary Resolution prior to the Early Instruction Deadline by delivery of a valid electronic Voting Instruction or DTC Instruction (which is not revoked) of U.S.$2.50 for each U.S.$1,000 in principal amount of the Notes held by Noteholders or (b) a Late Instruction Fee of U.S.$1.00 for each U.S.$1,000 in principal amount of the Notes held by Noteholders who vote in favor of the Extraordinary Resolution prior to the Final Instruction Deadline by delivery of a valid electronic Voting Instruction or DTC Instruction (which is not revoked). To be passed, the Extraordinary Resolution requires a majority voting in favor consisting of not less than three quarters of the votes cast at a duly convened and quorate Meeting. If passed, the Extraordinary Resolution will be binding upon all the Noteholders, whether or not present at the Meeting and whether or not voting. The Meeting will be held at 3:00 p.m. (London time) on February 15, 2011 at the offices of Latham & Watkins LLP at 99 Bishopsgate, London EC2M 3XF, United Kingdom. Voting can take place by Electronic Voting Instruction via the Clearing Systems, DTC Instruction via DTC or by attending the Meeting and producing a Note or a valid Form of Proxy or Form of Sub-Proxy.

MTS has retained The Royal Bank of Scotland plc (“RBS”) to act as sole Solicitation Manager and The Bank of New York Mellon to act as Tabulation Agent (“BNYM”). Copies of the Consent Solicitation Statement can be obtained from either RBS or BNYM. Requests for information in relation to this consent solicitation and the Proposals should be directed to RBS by phone at +44 20 7085 8056 (London) / +1 203 897 6145 (New York) or via email at liabilitymanagement@rbs.com. Requests for information in relation to the procedures for voting in the Meeting should be directed to The Events Administration Team at BNYM, at (+44 20 7964 4958 /eventsadmin@bnymellon.com).

This press release is not a solicitation of consents nor shall it be deemed a solicitation of consents with respect to any securities. The consent solicitation will be made solely by way of the Consent Solicitation Statement.

1A private company organized and existing as a private limited company under the laws of Ireland.

 

 

 

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