Moscow, Russia – October 14, 2005 – Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, today announced that, according to press reports, Open Joint Stock Company ASVT ("ASVT") has filed a lawsuit against Sistema in a Russian court for approximately 50 billion rubles (US$1.75 billion at the current exchange rate). The lawsuit relates to Sistema's investment in Mobile TeleSystems OJSC ("MTS") made over ten years ago. There is also a second related lawsuit against Limited Liability Partnership VAST ("VAST"), in which ASVT seeks to be named as its sole owner. Sistema and its subsidiary MGTS are named as third parties in the second lawsuit.

Sistema and ASVT own 51% and 49%, respectively, of VAST, which owns approximately 3% of MTS. Sistema's current majority ownership in MTS includes its beneficial ownership of 1.5% of the shares of MTS through VAST.

While Sistema has not yet received official notice of the lawsuits, the Company believes there is no legal basis for the claims and intends to vigorously defend itself.