The European Investment Bank (EIB) is lending EUR 115 million to Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), for the upgrading and further development of mobile networks to increase the quality and accessibility of broadband services in the Russian Federation.  This is the first EIB loan supporting a telecommunication project under the Bank’s mandate covering financing in Russia, Eastern Europe and Southern Caucasus.

The project, which is jointly financed by the European Investment Bank, the European Bank for Reconstruction and Development and the Nordic Investment Bank, is focused on the rollout of 3G/UMTS-based mobile broadband services in the Russian Federation in terms of the purchase and installation of equipment and software licences for UMTS-based 3G access and core network. EIB funds will allow MTS to increase its rollout of 3G networks to additional cities in Russia in 2009. This will facilitate efficient communications through improved access to internet, multimedia and telecommunication services, thus contributing to increased connectivity and economic growth.

By improving the access to modern information and communications technology networks, the project will support the EIB’s lending priority of promoting investment that leads to the establishment of a knowledge-based society and contribute to the development of an information society in Europe.

Background information:

About the EIB

The EIB is entitled to lend up to EUR 3.7 billion with a Community Guarantee to projects in Russia, Eastern European and Southern Caucasus countries within the period 2007-2013. There is no ex-ante allocation of the overall amount by country; the EIB is prepared to consider support to sound projects in the areas of transport, energy, telecommunications and environmental infrastructure.

In Russia, apart from the current loan, the EIB has provided financing amounting to some EUR 100 million supporting environmental projects focused on the improvement of water quality in the Baltic Sea and anti-flood measures in St. Petersburg.

About Mobile TeleSystems (MTS)

Mobile TeleSystems OJSC (“MTS”) is the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, the Company services over 93.98 million subscribers. The regions of Russia, as well as Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan, in which MTS and its associates and subsidiaries are licensed to provide GSM services, have a total population of more than 230 million. Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT).