$78.5 million EBITDA, $31 million net income

Net revenues for the first three months of 2001 rose to $166 million, an increase of 63% compared to the same period in 2000. This reflects the explosive demand for mobile services and indicates that the positive performance of the Russian economy over the last year is progressing into this year. Earnings before interest, tax, depreciation and amortization (EBITDA) for the first three months of 2001 were $78 million, an increase of 51% compared to the first quarter of 2000. EBITDA margin for the first quarter was 47% compared to 51% in the first quarter 2000. EBITDA margin on a rolling 12 month period ended 31st March 2001 and 31st December 2000 was a stable 43% for both periods. Net income for the first three months of 2001 was US$31 million, an increase of 62% for the same period of 2000. Operational highlights

For the twelve months period ended 31st March 2001, MTS’s active subscriber base increased by 246% to more than 1.4 million subscribers. On April 25th, 2001 the company announced that the number of its active subscribers exceeded 1.5 million people. MTS’s active subscriber base in Moscow and the Moscow Region totaled 1,302,000 subscribers as of 31st March 2001. Regions outside the Moscow license area also witnessed steady growth in their subscriber base and increased by 815% during the twelve months, reaching 119,000 as of 31st March 2001. Average monthly revenue per user (ARPU) in the first quarter decreased to $40 from $82 in the first quarter of 2000. The average monthly minutes of use per subscriber (MOU) in the first quarter of 2001 was 152 minutes. The MOU in the first quarter of 2000 was also 152 minutes. This figure is not only a reflection of deeper entry into the mass market, but also a typical first quarter seasonal effect. Churn rate for the first quarter 2001 was 6.1% compared to 8.4% for the same period ended March 31st 2000. Subscriber acquisition costs per gross new additional subscriber have decreased 33% to $64 from $93 in the first quarter of 2001 compared to the first quarter 2000 accordingly. This highlights MTS’ strategy of tight cost control. The number of base stations in MTS network as of 31st March 2001 totaled 1240, including 862 in the Moscow license area and 378 in the Regional license area. Capital expenditures for the first quarter 2001 have totaled $79 million, while capital expenditures for the same period 2000 were $36,5 million. In April 2001 MTS acquired a controlling interest in ReCom, which was previously an unconsolidated subsidiary. The company increased its stake to 53.9% from 49.9%. This will allow MTS to consolidate ReCom in its next quarterly financial statements. Per 31st of March 2001 ReCom had 26,000 subscribers. In 2000 ReCom showed revenues of $7.4m; EBITDA of $2.7 million, and EBITDA margin of 36%. Net income was $0.6 million. Cumulative network investments at year end 2000 had reached $17.2 million; annual capital expenditures in the year 2000 were $10.4m. ReCom’s average revenue per user per month (ARPU) in 2000 was $65. MTS is actively carrying out research and construction works for the development of networks in six regions within its license areas: Nizhny Novgorod, Ivanovo, Kirov, Chelyabinsk, Tumen, and Perm Regions. Commenting on the results, Mr Mikhail Smirnov, President and Chief Executive Officer of Mobile TeleSystems OJSC, said: “MTS had another excellent quarter with continued growth both in subscribers and the bottom line. We are satisfied with the the first quarter results, especially keeping in mind that the first quarter sales in the industry are traditionally lower than the following quarters. We are fully confident that the trend will also apply to us this year. Our EBITDA margin is at its usual over 40% level”. “MTS has continued to take advantage of a growing mobile telecommunications market. We continue to invest in a sophisticated, technically state-of-the-art network. Recent introduction of new tariffs for intranet calls, meeting the differing needs of an increasingly diversified market, gives us good expectations that the steady growth will continue” he said.

MTS consolidated condensed statements of operations, comparing three months ended 31 March 2001 against three months ended 31 March 2000 and twelve months ended 31 March 2001 against twelve months ended 31 December 2000