High-growth Markets – Superior Profitability

MTS operates in high-growth markets that offer superior profitability to investors. As a Moscow-based operator, Russia and the CIS represent the Company’s home market for a number of reasons, including:

• Shared recent history
• Common linguistics and cultural ties
• Increasing business and economic ties

Currently, the entire region is experiencing strong economic growth, which is in turn driving mobile telephone usage and penetration. With market-leading operations in four of the five largest markets in the CIS, MTS is very well positioned to take advantage of the region’s continuing development and to seek further opportunities for expansion and development.

Positive Outlook for Core Markets

Russia and Ukraine represent the two economies in which MTS has its largest subscriber bases. Positive growth trends in these markets include:

• Strong increases in GDP
• Relatively stable national currencies
• Strong domestic demand for mobile services
• Rising real wages
• High mobile penetration

Similar trends are evident in Uzbekistan, Turkmenistan and Armenia – though mobile penetration remains much lower in these markets. By leveraging its long-standing experience in developing low-penetrated markets of the CIS, MTS intends to take advantage of the growth potential of these regions.