Moscow, Russia - November 27, 2006 - Sistema shareholders - physical persons - announced today their willingness to reimburse MTS from their own funds for potential losses arising from realization of option agreement to buy 49% of shares of Bitel LLP.

JSC MTS, a subsidiary of JSFC Sistema, has received what is purported to be a notice from Nomihold Securities Inc. pursuant to a put option agreement connected with the acquisition of the remaining 49% shares of Tarino Limted and its direct and indirect subsidiaries for the purpose of transferring for $170 million the remaining interest in Bitel LLP, a Kyrgyz mobile operator, to MTS.  

As announced in December 2005, MTS acquired a 51% stake in Tarino Limited.  Tarino Limited was at that time the indirect owner, through its 100% owned subsidiaries, of Bitel LLP.

Were Nomihold able to comply fully with its contractual and legal duties, MTS would honor its obligations under its agreements with Nomihold and would waive any other claims it may have.  However, circumstances with respect to certain Tarino subsidiaries including Bitel LLP - the transfer of which was the basic objective of the agreements - would appear to make it impossible for Nomihold to comply with its obligations during the option period. Because Nomihold will most likely be unable to fully comply with its contractual obligations, if Nomihold insists on exercising the put, Nomihold's notice will be without legal basis and MTS will vigorously defend its rights.

The shareholders of Sistema further stated that should a dispute arise with respect to the put option, the shareholders will assist MTS in defending its rights, but if any arbitration award is eventually entered against MTS, the shareholders will indemnify MTS for such award.

"We are absolutely certain that MTS will be able to uphold its rights. We also realize that a certain risk exists. The decision made by private shareholders of Sistema was dictated by their desire to protect MTS from possible risks", - said Mr. Alexander Leiviman, Sistema shareholder.

Sistema shareholders, who indemnified MTS, are: Messrs. B.E. Bolshakov, A.N. Buyanov, A.Y. Goncharuk, A.I. Gorbatovskiy, S.A. Drozdov, V.P. Yevtushenkov, D.L. Zubov, V.I. Inozemtsev, V.V. Kopiev, A.L. Leiviman, E.G. Novitskiy.