Moscow, Russia - April 18, 2006 - Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, today announced that the regular valuation conducted by Cushman & Wakefield Stiles & Riabokobylko ("C&WS&R") on Sistema's  real estate portfolio demonstrated that the enlarged portfolio has more than doubled in value over the past year.

Based on current values as at January 1, 2006, C&WS&R estimated that the aggregated market value of a 100% share of the freehold or leasehold interest in the 54 portfolio properties totalled approximately US $ 898.6 million, of which approximately US$ 709.2 million (1) was attributable to Sistema. This compared to an estimated current aggregated market value of approximately US$ 316.3 million as at December 30, 2004 for the then 28 properties in the portfolio, of which approximately US$ 238.5 million (1) was attributable to Sistema. The 2004 valuation report was also conducted by C&WS&R.

The above January 1, 2006 valuation excludes the "Big City" commercial office space development in Central Moscow, which has been analysed on a very restrictive set of assumptions and should be considered separately from the valuation as a whole. Based on current values as at January 1, 2006, C&WS&R estimated the market value of the project to be approximately US$ 460.9 million, but the attributable value to Sistema is currently unknown as the project is at an early stage of development. C&WS&R estimated the total market value of the whole real estate portfolio, including the "Big City" project, to be approximately US$ 1,359.5 million, but the value attributable to Sistema is unclear due to the significant proportion that is made up by the "Big City" project.

The valuations stated above represent the aggregate of the current values of the individual properties, and should not therefore be regarded as valuations of the entire portfolio as a single lot.

The valuations are also subject to the limitations and assumptions referenced in the summary of the most recent valuation report, which is now available online in full at https://www.sistema.com/binary/Sistema_RE_Valuation_Report_by_CWSR_v.2.pdf

(1) Sistema's estimate represents the sum of the multiples of: (i) the beneficial ownerships as at January 1, 2006 and (ii) the market values of the corresponding properties from the January 1, 2006 C&W&S&R report