Moscow, Russian Federation — May 15, 2007 — Mobile Telesystems OJSC («MTS» — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces the recommended amount of dividends and the adoption of a dividend policy.

The MTS Board of Directors (BoD) meeting held on May 15, 2007, recommended the annual general meeting of shareholders (AGM) approve annual dividends of RUR 9.67 per ordinary MTS share (approximately $1.87 per ADR¹) for the 2006 fiscal year, amounting to a total of RUR 19.28 billion ($747.44 million²). As announced earlier, the record date for the Company’s share- and ADR-holders entitled to participate in the AGM and to receive dividends was set for May 14, 2007. The AGM will be held on June 29, 2007.

The BoD also approved a dividend policy, whereby the Company will target a return of a minimum of 50% of annual US GAAP net income to its shareholders through dividend payments. The amount could vary depending on a number of factors, including the outlook for earnings growth, capital expenditure requirements, cash flow from operations, potential acquisition opportunities as well as the Company’s debt position.

The Chairman of MTS’ BoD, Sergey Schebetov, commented: «As MTS enters into a more mature phase in its development, the Board felt that, given our strengths in governance, it was important to give investors greater clarity as to the financial strategy of the Company. In keeping with our historical practices, the Company will commit to including annual dividend payments as part of our commitment to enhancing shareholder value. As a leading telecommunications group with operations in rapidly developing markets, MTS’ primary need is to maintain sufficient resources and flexibility to meet our financial and operational requirements. At the same time, MTS continually seeks ways to create shareholder value through both its commercial and financial strategies, including both organic and inorganic development as well as the Company’s capital management practices.»

¹ According to the Russian Central Bank exchange rate of 25.8067 RUR/$ as of May 15, 2007.
² The amount is 60% of net income under US GAAP.