Mobile TeleSystems Announces Financial Results for the First Quarter Ended March...

Mobile TeleSystems Announces Financial Results for the First Quarter Ended
March 31, 2008

MOSCOW, May 20 /PRNewswire-FirstCall/ -- Mobile TeleSystems OJSC ("MTS" -
NYSE: MBT), today announced its unaudited consolidated US GAAP financial
results for the three months ended March 31, 2008.
Key Financial Highlights of Q1 2008

- Consolidated revenues up 37% y-o-y to $2,379 million
- Consolidated OIBDA(1) up 30% to $1,176 million y-o-y with
49.4% OIBDA margin
- Consolidated net income up 36% y-o-y to $610 million
- Free cash-flow(2) generation of $632 million

Key Corporate and Industry Highlights

- Appointment of Mr. Andrei Dubovskov as the new head of MTS
Ukraine
- MTS first Russian company named as BRANDZ(TM) Top 100 Most
Powerful Brands by Millwood Brown and Financial Times
- Consolidation of remaining stake in the Omsk subsidiary
- Redemption of the $400 million Eurobond issued in 2003
- Announcement of recommended dividend payment for FY 2007 of
$1.2 billion or $3.12 per ADR(3)

Leonid Melamed, President and Chief Executive Officer, highlighted, "We
are pleased to deliver on our promise of profitable growth throughout the
Group's operations. In Russia, we are witnessing clear momentum as we
continue to add subscribers and realize the benefits of increasing voice and
data usage. In Ukraine, we see positive trends in usage growth and service
adoption, while in our remaining CIS markets, we are building out our
networks to bring mobile service deeper into the local populations. In all,
we are confident that we can sustain this momentum to continue executing on
our corporate strategy." Financial Summary (unaudited)

US$ million Q1'08 Q1'07 y-o-y Q4'07 q-o-q

Revenues 2,379 1,741 +37% 2,326 +2%
OIBDA 1,176 903 +30% 1,127 +4%
- margin 49.4% 51.9% -2.5pp 48.4% +1.0pp
Net operating 705 597 +18% 644 +9%
income
- margin 29.6% 34.3% -4.7pp 27.7% +1.9pp
Net income 610 449 +36% 460 +33%

Group Operating Review

Market Growth
Mobile penetration(4) in markets of operation was:

- Down from 119% to 116% in Russia;
- Down from 120% to 119% in Ukraine;
- Up from 22% to 25% in Uzbekistan;
- Up from 7% to 10% in Turkmenistan;
- Up from 58% to 60% in Armenia;
- Up from 73% to 75% in Belarus.

Subscriber Development
The Company added approximately 3.0 million new customers during the
first quarter of 2008 on a consolidated basis that were all added
organically. During the quarter MTS:
- Added 2.5 million subscribers in Russia;
- Churned 0.4 million in Ukraine;
- Added 0.8 million subscribers in Uzbekistan;
- Added 110 thousand subscribers in Turkmenistan;
- Added 34 thousand subscribers in Armenia.

Our Belarus operations added approximately 140 thousand subscribers
during the quarter.
Since the end of the first quarter to April 30, 2008, MTS has organically
added a further 0.74 million users, expanding its consolidated subscriber
base to 85.68 million.
Key Subscriber Statistics

(mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Total consolidated 74.16 74.67 77.97 81.97 84.94
subscribers, eop
Russia 51.50 52.68 54.42 57.43 59.90
Ukraine 20.75 19.81 19.91 20.00 19.61
Uzbekistan(5) 1.70 1.95 2.29 2.80 3.56
Turkmenistan 0.20 0.24 0.29 0.36 0.47
Armenia - - 1.07 1.38 1.42
MTS Belarus(6) 3.37 3.48 3.66 3.80 3.94

Market Share
MTS was able to maintain its leading position in the majority of its
markets of operation during the first quarter:
- Increased from 33% to 36% in Russia;
- Decreased from 36% to 35% in Ukraine;
- Increased from 50% to 52% in Uzbekistan;
- Decreased from 88% to 85% in Turkmenistan;
- Decreased from 74% to 73% in Armenia.

In Belarus, the market share increased to 54% from 53%.
Customer Segmentation
Subscriptions to MTS' pre-paid tariff plans accounted for 86% of gross
additions in Russia and 94% in Ukraine in the first quarter. At the end of
the quarter, 88% of MTS' customers in Russia were signed up to pre-paid
tariff plans. In Ukraine, the share of customers signed to pre-paid tariff
plans remained at 92%. Russia Highlights

US$ mln Q1'08 Q1'07 y-o-y Q4'07 q-o-q

Revenues 1,798 1,309 +37% 1,723 +4%
OIBDA 877 682 +29% 822(7) +7%
- margin 48.8% 52.1% -3.3pp 47.7% +1.1pp
Net income 494 362 +36% 344 +44%
CAPEX 205 110 +86% 490 -58%
- as % of 11.4% 8.4% +3.0pp 28.4% -17.0pp
rev

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

ARPU (US$) 8.2 9.2 10.0 10.0 10.0
MOU (min) 134 151 167 187 193
Churn rate 6.1 5.2 7.1 5.1 4.8
(%)
SAC (US$) 26.2 28.9 24.3 26.6 29.5

Ukraine Highlights

US$ mln Q1'08 Q1'07 y-o-y Q4'07 q-o-q

Revenues 409 351 +17% 425 -4%
OIBDA 190 168 +13% 195 -3%
- margin 46.5% 48.0% -1.5pp 45.8% +0.7pp
Net income 87 64 +36% 75 +16%
CAPEX 109 110 -1% 169 -36%
- as % of 26.6% 31.2% -4.6pp 39.7% -13.1pp
rev

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

ARPU (US$) 5.7 6.4 7.3 7.1 6.8
MOU (min) 135 152 162 163 175
Churn rate 7.8 14.1 12.5 14.4 10.3
(%)
SAC (US$) 11.2 13.7 10.9 12.7 13.8

Uzbekistan Highlights

US$ mln Q1'08 Q1'07 y-o-y Q4'07 q-o-q

Revenues 79 49 +61% 77 +3%
OIBDA 49 31 +58% 49 stable
- margin 61.8% 63.7% -1.9pp 63.6% -1.8pp
Net income 32 17 +88% 31 +3%
CAPEX 11 3 +267% 13 -15%
- as % of 14.2% 5.5% +8.7pp 16.4% -2.2pp
rev

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08(8)

ARPU (US$) 10.3 10.4 10.3 10.0 8.3
MOU (min) 463 549 565 574 520
Churn rate 16.8 17.9 14.3 13.5 2.8
(%)
SAC (US$) 4.1 3.7 4.4 4.8 7.0

Turkmenistan Highlights(9)

US$ mln Q1'08 Q1'07 y-o-y Q4'07 q-o-q

Revenues 44 35 +26% 47 -6%
OIBDA 27 22 +23% 29 -7%
- margin 61.6% 61.2% +0.4pp 61.4% +0.2pp
Net income 13 6 +117% 3 +333%
CAPEX 15 1 +1400% 27 -44%
- as % of 35.3% 4.0% +31.3pp 58.3% -23.0pp
rev

Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

ARPU (US$) 61.4 63.4 57.4 48.1 35.4
MOU (min) 227 264 299 282 273
Churn rate 6.1 6.3 8.6 5.5 5.0
(%)
SAC (US$) 47.7 26.9 20.8 19.7 14.8

Armenia Highlights

US$ mln Q1'08 Q4'07 q-o-q

Revenues 55 58 -5%
OIBDA 32 33 -3%
- margin 57.9% 56.2% +1.7pp
Net income (16) 7 -
/(loss)
CAPEX 2 14 -86%
- as % of rev 3.7% 24.0% -20.3pp

Q3'07 Q4'07 Q1'08

ARPU (US$) 15.7 15.8 12.8
SAC (US$) 12.9 15.2 26.7

Group Financial Position
MTS' expenditure on property, plant and equipment in the first quarter
totaled approximately $282 million, of which $151 million was invested in
Russia, $103 million in Ukraine, $11 million in Uzbekistan, $15 million in
Turkmenistan and $2 million in Armenia.
MTS spent approximately $61 million on the purchase of intangible assets
during the quarter of which $54 million was spent in Russia, $6 million in
Ukraine and $1 million in Armenia.
As of March 31, 2008, MTS' total debt(10) was at $3.1 billion, resulting
in a ratio of total debt to LTM OIBDA(11) of 0.7 times. Net debt amounted to
$2.5 billion at the end of the quarter and the net debt to LTM OIBDA of 0.6
times.
Mobile TeleSystems OJSC ("MTS") is the largest mobile phone operator in
Russia and the CIS. Together with its subsidiaries, the Company services over
85.68 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).
Additional information about MTS can be found on MTS' website at
http://www1.mtsgsm.com.
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. You can identify
forward looking statements by terms such as "expect," "believe,"
"anticipate," "estimate," "intend," "will," "could," "may" or "might," and
the negative of such terms or other similar expressions. 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 statements to
reflect events and circumstances occurring after the date hereof or to
reflect the occurrence of unanticipated events. 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 Form 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 and the CIS, volatility of stock price,
financial risk management and future growth subject to risks.
Attachments to the First Quarter 2008
Earnings Press Release
Attachment A
Non-GAAP financial measures. This press release includes financial
information prepared in accordance with accounting principles generally
accepted in the United States of America, or US GAAP, as well as other
financial measures referred to as non-GAAP. The non-GAAP financial measures
should be considered in addition to, but not as a substitute for, the
information prepared in accordance with US GAAP.
Operating Income Before Depreciation and Amortization (OIBDA) and OIBDA
margin. OIBDA represents operating income before depreciation and
amortization. OIBDA margin is defined as OIBDA as a percentage of our net
revenues. Our OIBDA may not be similar to OIBDA measures of other companies;
is not a measurement under accounting principles generally accepted in the
United States and should be considered in addition to, but not as a
substitute for, the information contained in our consolidated statement of
operations. We believe that OIBDA provides useful information to investors
because it is an indicator of the strength and performance of our ongoing
business operations, including our ability to fund discretionary spending
such as capital expenditures, acquisitions of mobile operators and other
investments and our ability to incur and service debt. While depreciation and
amortization are considered operating costs under generally accepted
accounting principles, these expenses primarily represent the non-cash
current period allocation of costs associated with long-lived assets acquired
or constructed in prior periods. Our OIBDA calculation is commonly used as
one of the bases for investors, analysts and credit rating agencies to
evaluate and compare the periodic and future operating performance and value
of companies within the wireless telecommunications industry. OIBDA can be
reconciled to our consolidated statements of operations as follows:
Group (US$ mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating income 597.2 691.0 801.8 643.8 704.6
Add: D&A 305.9 327.7 372.9 483.0 470.9
OIBDA 903.1 1,018.7 1,174.7 1,126.9 1,175.5

Russia (US$ mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating income 463.6 531.1 612.0 469.3 562.5
Add: D&A 218.3 236.8 268.8 352.7 314.9
OIBDA 681.9 767.9 880.9(12) 822.0(13) 877.4

Ukraine (US$ mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating income 92.9 120.6 136.7 106.7 85.4
Add: D&A 75.5 78.3 83.1 88.1 104.8
OIBDA 168.4 198.8 219.7 194.8 190.1

Uzbekistan (US$ mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating income 23.6 28.5 27.0 35.2 35.1
Add: D&A 7.7 8.2 14.1 13.5 13.9
OIBDA 31.3 36.7 41.1 48.7 49.1

Turkmenistan (US$ mln) Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating income 17.2 10.8 22.6 22.9 21.9
Add: D&A 4.4 4.4 5.4 5.7 5.1
OIBDA 21.6 15.2 28.1 28.6 26.9

Armenia (US$ mln) Q3'07 Q4'07 Q1'08

Operating income/ 3.5 9.7 (0.3)
(loss)
Add: D&A 1.5 23.0 32.2
OIBDA 5.0 32.7 32.0

OIBDA margin can be reconciled to our operating margin as follows:

Group Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating margin 34.3% 35.1% 36.2% 27.7% 29.6%
Add: D&A 17.6% 16.6% 16.8% 20.7% 19.8%
OIBDA margin 51.9% 51.7% 53.0% 48.4% 49.4%

Russia Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating margin 35.4% 35.9% 36.6% 27.2% 31.3%
Add: D&A 16.7% 16.0% 16.1% 20.5% 17.5%
OIBDA margin 52.1% 51.8% 52.8% 47.7% 48.8%

Ukraine Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating margin 26.5% 30.7% 31.2% 25.1% 20.9%
Add: D&A 21.5% 19.9% 18.9% 20.7% 25.6%
OIBDA margin 48.0% 50.6% 50.1% 45.8% 46.5%

Uzbekistan Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating margin 48.0% 50.1% 41.0% 45.9% 44.3%
Add: D&A 15.7% 14.4% 21.5% 17.6% 17.6%
OIBDA margin 63.7% 64.4% 62.5% 63.6% 61.8%

Turkmenistan Q1'07 Q2'07 Q3'07 Q4'07 Q1'08

Operating margin 48.8% 26.1% 50.0% 49.1% 50.0%
Add: D&A 12.4% 10.8% 12.0% 12.3% 11.6%
OIBDA margin 61.2% 36.8% 62.0% 61.4% 61.6%

Armenia Q3'07 Q4'07 Q1'08

Operating margin 41.9% 16.7% (0.5%)
Add: D&A 17.9% 39.5% 58.5%
OIBDA margin 59.8% 56.2% 57.9%

Attachment B
Net debt represents total debt less cash and cash equivalents and
short-term investments. Our net debt calculation is commonly used as one of
the bases for investors, analysts and credit rating agencies to evaluate and
compare our periodic and future liquidity within the wireless
telecommunications industry. The non-GAAP financial measures should be
considered in addition to, but not as a substitute for, the information
prepared in accordance with US GAAP. Net debt can be reconciled to our
consolidated balance sheets as follows:

US$ million As of As of
Dec 31, Mar 31,
2007 2008

Current portion of debt and of capital 713.3 466.1
lease obligations
Long-term debt 2,686.5 2,607.5
Capital lease obligations 1.9 2.5
Total debt 3,401.7 3,076.2
Less:

Cash and cash equivalents (634.5) (552.5)

Short-term investments (15.8) (15.8)
Net debt 2,751.4 2,507.9

Last twelve month (LTM) OIBDA can be reconciled to our consolidated
statements of operations as follows:
Year ended Three month Nine month ended
Dec 31, ended Mar Dec 31,
US$ million 2007 31, 2007 2007
A B C=A-B

Net operating 2,733.8 597.2 2,136.6
income

Add: depreciation 1,489.6 305.9 1,183.7
and amortization

OIBDA 4,223.4 903.1 3,320.3

OIBDA Q1 2008 1,175.5

LTM OIBDA as of 4,495.8
March 31, 2008

Free cash-flow can be reconciled to our consolidated statements of cash
flow as follows:

US$ million For the For the
three months three months
ended Mar ended Mar
31, 2007 31, 2008

Net cash provided by operating 736.1 991.5
activities
Less:
Purchases of property, plant and (206.5) (281.0)
equipment
Purchases of intangible assets (17.4) (61.4)
Proceeds from sale of property, plant - 23.2
and equipment
Purchases of other investments - (21.2)
Investments in and advances to - -
associates
Acquisition of subsidiaries, net of - (19.4)
cash acquired
Free cash-flow 512.2 631.7

Attachment C
Definitions
Subscriber. We define a "subscriber" as an individual or organization
whose account shows chargeable activity within sixty one days in the case of
post-paid tariffs, or one hundred and eighty three days in the case of our
pre-paid tariffs, or whose account does not have a negative balance for more
than this period.
Average monthly service revenue per subscriber (ARPU). We calculate our
ARPU by dividing our service revenues for a given period, including
interconnect and guest roaming fees, by the average number of our subscribers
during that period and dividing by the number of months in that period.
Average monthly minutes of usage per subscriber (MOU). MOU is calculated
by dividing the total number of minutes of usage during a given period by the
average number of our subscribers during the period and dividing by the
number of months in that period.
Churn. We define our "churn" as the total number of subscribers who cease
to be a subscriber as defined above during the period (whether involuntarily
due to non-payment or voluntarily, at such subscriber's request), expressed
as a percentage of the average number of our subscribers during that period.
Subscriber acquisition cost (SAC). We define SAC as total sales and
marketing expenses and handset subsidies for a given period. Sales and
marketing expenses include advertising expenses and commissions to dealers.
SAC per gross additional subscriber is calculated by dividing SAC during a
given period by the total number of gross subscribers added by us during the
period.
MOBILE TELESYSTEMS
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

(Amounts in thousands of U.S. dollars,
except share and per share amounts)

Three months Three months
ended ended
March 31, March 31,
2008 2007

Net operating revenue
Service revenue and connection fees $2,373,531 $1,719,303
Sales of handsets and accessories 5,685 22,128
2,379,216 1,741,431
Operating expenses
Cost of services 557,299 362,987
Cost of handsets and accessories 25,723 40,899
Sales and marketing expenses 213,996 138,468
General and administrative expenses 346,412 253,163
Depreciation and amortization 470,898 305,909
Provision for doubtful accounts 25,734 18,332
Other operating expenses 34,550 24,458

Net operating income 704,604 597,215

Currency exchange and transaction (95,864) (28,669)
gains

Other expenses / (income):
Interest income (3,785) (7,623)
Interest expense, net of amounts 40,606 37,870
capitalized
Other expenses / (income) (10,710) (27,301)
Total other expenses, net 26,111 2,946

Income before provision for income 774,357 622,938
taxes and minority interest

Provision for income taxes 165,925 168,091

Minority interest (1,722) 6,266

Net income $610,154 $448,581
Weighted average number of common 1,943,934 1,987,610
shares outstanding, in thousands -
basic
Earnings per share - basic and 0.31 0.23
diluted

MOBILE TELESYSTEMS
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND DECEMBER 31, 2007

(Amounts in thousands of U.S.
dollars, except share amounts)

As of March 31, As of December 31,
2008 2007
CURRENT ASSETS:
Cash and cash equivalents $552,527 $634,498
Short-term investments 15,782 15,776
Trade receivables, net 409,905 386,608
Accounts receivable,
related parties 33,727 25,004
Inventory and spare parts 150,205 140,932
VAT receivable 238,271 310,548
Prepaid expenses
and other current assets 483,833 433,291
Total current assets 1,884,250 1,946,657

PROPERTY, PLANT AND EQUIPMENT 6,824,236 6,607,315

INTANGIBLE ASSETS 2,051,470 2,095,468

INVESTMENTS IN AND
ADVANCES TO ASSOCIATES 211,491 195,908

OTHER INVESTMENTS 22,594 1,355

OTHER ASSETS 131,148 119,964

Total assets 11,125,189 10,966,667

CURRENT LIABILITIES
Accounts payable 523,981 486,666
Accrued expenses and
other current liabilities 1,408,174 1,251,233
Accounts payable, related parties 168,379 160,253
Current portion of long-term
debt, capital lease obligations 466,147 713,282
Total current liabilities 2,566,681 2,611,434

LONG-TERM LIABILITIES
Long-term debt 2,607,537 2,686,509
Capital lease obligations 2,515 1,876
Deferred income taxes 93,071 114,171
Deferred revenue and other 100,970 89,696
Total long-term liabilities 2,804,093 2,892,252

Total liabilities 5,370,774 5,503,686

COMMITMENTS AND CONTINGENCIES - -

MINORITY INTEREST 11,859 20,051

SHAREHOLDERS' EQUITY:
Common stock: (2,096,975,792
shares with a par value of 0.1
rubles authorized and 1,993,326,138
shares issued as March 31, 2008 and
December 31, 2007 (777,396,505
of which are in the form of ADS as
of March 31, 2008 and December 31, 2007) 50,558 50,558

Treasury stock (57,908,337 and 32,476,837
common shares at cost as of March 31,
2008 and December 31, 2007) (791,495) (368,352)

Additional paid-in capital 580,041 579,520
Unearned compensation - -
Shareholder receivable - -
Accumulated other comprehensive income 816,284 704,189
Retained earnings 5,087,168 4,477,015
Total shareholders' equity 5,742,556 5,442,930

Total liabilities and
shareholders' equity $11,125,189 $10,966,667

MOBILE TELESYSTEMS
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007

(Amounts in thousands of U.S. dollars)

Three months ended Three months ended
March 31, 2008 March 31, 2007

Net cash provided
by operating activities 991,545 736,114

CASH FLOWS FROM
INVESTING ACTIVITIES:
Acquisition of subsidiaries,
net of cash acquired (19,395) -
Purchases of property,
plant and equipment (281,019) (206,486)
Purchases of intangible assets (61,418) (17,390)
Proceeds from sale of property,
plant and equipment and
assets held for sale 23,249 -
Purchases of short-term
investments - (103,968)
Proceeds from sale of
short-term investments - 55,231
Purchase of other investments (21,239) -
Increase in restricted cash 7,887 537
Net cash used in
investing activities (351,935) (272,076)

CASH FLOWS FROM
FINANCING ACTIVITIES:
Repurchase of common stock (423,143) -
Notes and debt issuance cost (278) (525)
Capital lease obligation
principal paid (1,349) (966)
Proceeds from loans 105,105 -
Loan principal paid (435,385) (39,553)
Net cash used in
financing activities (755,050) (41,044)

Effect of exchange rate
changes on cash and
cash equivalents 33,469 880

NET INCREASE IN CASH
AND CASH EQUIVALENTS: (81,971) 423,874

CASH AND CASH EQUIVALENTS,
at beginning of period 634,498 219,989

CASH AND CASH EQUIVALENTS,
at end of period $552,527 $643,863

---------------------------------

(1) See Attachment A for definitions and reconciliation of
OIBDA and OIBDA margin to their most directly comparable US GAAP
Financial measures.

(2) See Attachment B for reconciliation of free cash-flow to
net cash provided by operating activity.

(3) According to the Russian Central Bank exchange rate of 23.7939 RUR/$
as of May 5, 2008.

(4) The source for all market information based on the number of SIM
cards in Russia and Ukraine in this press release is AC&M-Consulting.

(5) Staring from Q1 2008 MTS employs a six-month inactive
churn policy in Uzbekistan

(6) MTS owns a 49% stake in Mobile TeleSystems LLC, a mobile
operator in Belarus, which is not consolidated.

(7) Including intercompany of $0.4 mln.

(8) In Q1 2008, MTS Uzbekistan moved away from a two-month to a six-month
churn policy.

(9) On January 1, 2008, the Central Bank of Turkmenistan raised the
official exchange rate of the Turkmenistan Manat to the US dollar from
5,200 to 6,250. On May 1, 2008, another decree was passed by the
President of Turkmenistan that established the official exchange rate at
14,250 Manat per 1 USD.

(10) Total debt is comprised of the current portion of debt,
current capital lease obligations, long-term debt and long-term capital
lease obligations; net debt is the difference between the total debt and
cash and cash equivalents and short-term investments; see Attachment B
for reconciliation of net debt to our consolidated balance sheet.

(11) LTM OIBDA represents the last twelve months of rolling OIBDA. See
Appendix B for reconciliations to our consolidated statements.

(12) Including intercompany of $2.2 mln.

(13) Including intercompany of $0.4 mln.

For further information, please contact:

Mobile TeleSystems, Moscow,
Investor Relations,
Tel: +7-495-223-2025,
E-mail: ir@mts.ru .

SOURCE Mobile TeleSystems OJSC

For further information, please contact: Mobile TeleSystems, Moscow, Investor
Relations, Tel: +7-495-223-2025, E-mail: ir@mts.ru .