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Mobile TeleSystems

August 3, 2001

Mobile TeleSystems hits the two million subscriber mark

Moscow, Russian Federation — 3 August 2001 — Mobile TeleSystems OJSC (NYSE: MBT), Russia’s leading mobile operator, announces that its’ customer base has reached a level of two million active subscribers. The two millionth customer of the integrated MTS network was registered at 10:30am today, at the MTS office in Kaluga.

Commenting on this event, Igor Timofeev, Marketing Director of Mobile TeleSystems OJSC, said: “I am delighted to see that the enormous efforts made by all of the team members at Mobile TeleSystems have been recognised by the cellular communications market. This is evident by the fact that as of today, two million people have made MTS their choice for mobile services”.

It took six years for MTS to gain one million subscribers, while the second million MTS subscribers joined the network in a mere eight and half months. This represents one of the fastest growing rates amongst mobile operators in Europe over such a short time frame. Such subscriber growth is also a record for MTS.

MTS’s customer growth has been achieved in an environment of intense competition and zero subsidies for the pre-pay market. The latter reflects the company’s commitment to providing its customers with a comprehensive range of GSM services, including national and international roaming.

MTS’ growing customer base is not only a stabilizing factor for further development of the company, but it also assists in attracting new customers. Having free incoming and reduced outgoing calls within the network allows MTS subscribers to fully appreciate the economic benefits provided by MTS. In addition, calls made to MTS subscribers in other towns of MTS’s operational regions are charged the same rates as local calls, thereby allowing MTS subscribers to save on long-distance calls.

As of today, the two million MTS subscribers can enjoy unique services such as reduced within-the-network roaming in all MTS regions in the European part of the Russian Federation. This means that a subscriber from Smolensk or Belgorod who comes to Moscow can make calls to Moscovites for only 391 cents per minute at daytime and for 291 cents at night.

During 2001, MTS has witnessed an impressive growth in its’ customer base in all of its operational regions. As of today, MTS active subscriber bases exceed 20,000 users in regions such as Ryazan, Tula and Omsk. In another five regions, the number of MTS active subscribers varies from 10,000—20,000 people (approximately 20,000 in Kaluga and Tver; approximately 10,000 in Yaroslavl, Izhevsk, Vladimir and the Komi Republic). More than 30,000 active subscribers have already joined the MTS network in the Smolensk region. The customer base of MTS’ subsidiary operating in the Orel, Bryansk, Lipetsk, Voronezh, Belgorod and Kursk regions reaches 45,000 users.

Due to advantages of the MTS network such as coverage zone, communications quality and flexible tariffs, the company has succeeded in gaining the dominant share on the regional cellular markets. MTS’ market share is estimated to be from 35% in the Voronezh and Yaroslavl regions to 55%-60% in the Lipetsk, Vladimir, Tver, Belgorod, Bryansk and Kursk regions. In regions such as Kostroma, Smolensk, Tula, Kaluga, Pskov and Komi Republic, MTS’s market share exceeds 85% on the cellular market. These results confirm the success of MTS’s profitable growth strategy and also reinforce MTS’s position as the leading cellular operator in Russia.

Expanding its activities as a federal operator, MTS concentrates its efforts on providing the single standard of high quality of communications and customer care. During the first seven months of 2001, MTS has installed 227 base stations, thus bringing the total number to 1,400 as at the end July 2001. To date this year, MTS has opened new centers in Moscow, Voronezh, Lipetsk, and also in the Smolensk, Ryazan, Vladimir, Kaluga and Orel regions (a total number of13 centres). This highlights the fact that MTS subscribers can enjoy the same high level of communications services provided by the company, irrespective of the region.

All prices in this press release are shown excepting VAT and sales tax.

For further information contact:

Eva Prokofieva
Press Secretary
tel: +7 (095) 104-49-38

Investor Relations department
tel: +7 (095) 766-01-03
Fax: +7 (095) 766-01-00

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statement to conform them to actual results. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, specifically, the Company’s most recent Forms F-1 and 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors,” that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures; rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.

Mobile TeleSystems OJSC (NYSE: MBT) is Russia’s leading GSM 900/1800 mobile cellular operator. MTS has GSM 900/1800 licenses to provide mobile cellular telephony services in 43 regions of the Russian Federation, covering 55% of the country’s population. It has commenced operations in 21 regions covering more than 41 million people. Information about MTS’s activities and services can be found on MTSs website at

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