Moscow, Russia - April 5, 2006 - Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, announced today its intention to acquire a 66% stake in WaveCrest Group Enterprises Ltd. ("WaveCrest"), the international telecommunications service provider, for a total cash consideration of GBP 20 million.The acquisition is being effected by means of a directed new share issue by WaveCrest.

WaveCrest is a global communications service provider offering wholesale (operator) and retail (residential) telephony services, using conventional circuit-switched and Internet protocol (IP) telephony. WaveCrest has an established switching presence in cities across Europe, USA and Asia including London, Paris, Amsterdam, Frankfurt, New York, Brussels, Milan and Hong Kong, and provides services to more than 300 leading international telecommunications operators. WaveCrest's residential services enable customers to terminate international voice, fax, mobile and modem traffic via the company's international network.  The company carries more than 300 million minutes of voice traffic per month and is also a leader in the UK and Republic of Ireland pre-paid calling cards markets. The company generated approximately US$ 280 million of revenue in 2005.

The acquisition was approved by Sistema's Board of Directors in March 2006 and is to be completed in the second quarter of 2006, subject to the applicable regulatory approvals. On completion of the transaction, WaveCrest would be fully consolidated in Sistema's financial results.

The proceeds from WaveCrest's additional share issue will be used for the general development and expansion of the company and its services.