OREANDA-NEWS. On 15 August 2008 Mobile  TeleSystems OJSC (“MTS” - NYSE: MBT), announced its unaudited consolidated US GAAP financial results for the three months ended June 30, 2008.

Key Financial Highlights of Q2 2008  Consolidated revenues up 34% y-o-y to USD 2,635 million Consolidated OIBDA  up 32% to USD 1,349 million y-o-y with 51.2% OIBDA margin   Consolidated net income up 30% y-o-y to USD 659 million Free cash-flow  generation of USD 1.1 billion in the first half of 2008

Key Corporate and Industry Highlights  Mr. Mikhail Shamolin named as the new President and CEO of MTS in May 2008  Launch of 3G in Russia with commercial availability in St. Petersburg, Kazan, Sochi, Nizhny Novgorod and Yekaterinburg  10 billion rouble bond placement 1.7x oversubscribed in June 2008  Approval of dividend payment for FY 2007 of USD 1.2 billion or USD 3.12 per ADR  at the Company’s Annual General Meeting of Shareholders in June 2008  Appointment of MTS President and CEO Mr. Shamolin to the GSMA Board in July 2008

Mr. Shamolin, President and Chief Executive Officer, commented, “MTS continues to execute on its corporate strategy, and we are pleased to have delivered our fifth consecutive quarter of revenue and earnings growth.  We see positive dynamics in usage growth and subscriber additions in our markets, while we were able to improve margins significantly in the period.  We are optimistic looking forward as our markets offer significant opportunities for continued growth.”

Group Operating Review  Market Growth Mobile penetration  in markets of operation was:

Up from 116% to 119% in Russia;

Level at 119% in Ukraine;

Up from 25% to 33% in Uzbekistan;

Up from 10% to 12% in Turkmenistan;

Up from 60% to 67% in Armenia;

Up from 75% to 80% in Belarus.  Subscriber Development The Company added approximately 2.0 million new customers during the second quarter of 2008 on a consolidated basis that were all added organically. During the quarter MTS:

Added 1.5 million subscribers in Russia;  Churned 0.5 million subscribers in Ukraine;  Added 0.8 million subscribers in Uzbekistan;  Added 108.7 thousand subscribers in Turkmenistan;  Added 77.2 thousand subscribers in Armenia. Our Belarus operations added approximately 81.7 thousand subscribers during the quarter.

Market Share MTS maintained its leading position in the majority of its markets of operation during the second quarter:   Maintained at 36% in Russia;  Maintained at 35% in Ukraine;  Decreased from 52% to 49% in Uzbekistan;  Increased from 85% to 86% in Turkmenistan;  Decreased from 73% to 70% in Armenia. In Belarus, the market share decreased to 52% from 54%.

Customer Segmentation Subscriptions to MTS’ pre-paid tariff plans accounted for 85% of gross additions in Russia and 95% in Ukraine in the second 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 was 92%.

Starting from Q2 2008, we will include connection fees in our calculation of ARPU as this is network-related revenue. ARPU is now calculated by dividing our service revenues for a given period, including interconnect, guest roaming fees and connection fees, by the average number of our subscribers during that period and dividing by the number of months in that period.

Group Financial Position MTS’ expenditure on property, plant and equipment in the second quarter totaled approximately USD 440 million, of which USD 236  million was invested in Russia, USD 175 million in Ukraine, USD 19 million in Uzbekistan, USD 8 million in Turkmenistan and USD 1 million in Armenia.

MTS spent approximately USD 105 million on the purchase of intangible assets during the quarter of which USD 50 million was spent in Russia, USD 34 million in Ukraine, USD 20 million in Uzbekistan, USD 0.4 million in Turkmenistan and USD 2 million in Armenia.  As of June 30, 2008, MTS’ total debt was at USD 3.3 billion, resulting in a ratio of total  of 0.7 times. Net debt amounted to USD 2.1 billion at the end of the debt to LTM OIBDA quarter and the net debt to LTM OIBDA of 0.4 times.