Moscow, Russian Federation, and London, UK – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, and Vodafone today announce a strategic, non-equity partnership to provide customers with high quality communications services and to collaborate jointly on future technological developments.

Under the agreement, MTS will be able to draw on Vodafone’s expertise in building and developing third generation (3G) networks and mobile broadband products, working with leading global equipment providers and deploying innovative CRM practices to enhance quality and further improve the efficiency of its operations. In addition, MTS will have an exclusive access to a range of products, services and devices from Vodafone for its markets of operation in Russia, Ukraine, Uzbekistan, Turkmenistan and Armenia.

The partnership with MTS will give Vodafone valuable insight into the opportunities of the important telecommunications markets of Russia and the CIS, which are among the fastest growing in the world.  Vodafone’s products will be made available to MTS’ 87 million subscribers, including more than 60 million customers in Russia.

Vodafone's products and services will be marketed in Russia and the CIS under a co-branded approach. Vodafone will also open a representative office in Moscow to co-operate more closely with MTS on future offerings and customer services.

“A partnership with Vodafone will allow MTS to bring tangible benefits to both its customers and shareholders,” said Mr. Mikhail Shamolin, President and CEO of MTS. “This groundbreaking agreement will give our customers the most innovative products and services from around the world. At the same time, Vodafone’s commercial insights and technical expertise will translate into significant operational efficiencies for MTS over the long-term as we transition our networks to 3G and beyond.”

Mr. Vittorio Colao, CEO of Vodafone, commented: “Our agreement with MTS is an opportunity for Vodafone to build its presence and work with the leading operator in these important markets. By combining the geographical reach of the company’s respective networks, we can give customers greater roaming capabilities and extended coverage.  We are delighted that MTS has joined our successful Partner Markets community, which will be much stronger with the addition of Russia and the CIS.”