Moscow, Russian Federation — Mobile TeleSystems OJSC («MTS» — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has acquired the remaining 25.01% stake in its subsidiary in Dagestan from Glaxen Corp., increasing the Company’s ownership to 100%.

MTS has purchased an additional 25.01% stake in Dagtelecom, LLC, for $41.56 million as Glaxen Corp. (BVI) exercised its put option. Purchase price shall be reduced by $12.5 million to offset the loan extended by MTS to Glaxen Corp. in spring 2008. In addition, following the review and assessment of the subsidiary’s performance during the period of the joint shareholding of MTS and Glaxen Corp. in Dagtelecom, MTS may potentially pay a premium in the amount not exceeding $10 million.

Earlier in July 2006, MTS purchased a 74.99% controlling stake in Dagtelecom and entered into the option agreement for the remaining stake.

Dagtelecom provides GSM 900 services under the MTS brand and is one of the leading wireless service providers in the Dagestan region with a population of 2.6 million, located in Southern Russia. As of December 31, 2008, Dagtelecom served around 449,000 subscribers.