OREANDA-NEWS. December 24, 2010. Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that the Company has suspended its operations in Turkmenistan in accordance with the notice from the Ministry of Communications of Turkmenistan received by MTS on December 15, 2010. The notice informed the Company of a decision to suspend licenses held by Barash Communications Technologies, Inc. (“BCTI”), MTS’ wholly-owned subsidiary in Turkmenistan, for a period of one month starting from December 21, 2010.

The Company has brought legal actions against the Ministry of Communications of Turkmenistan in the International Court of Arbitration at the International Chamber of Commerce in connection with a number of breaches by the Ministry of the trilateral agreement1 (“Agreement”) and in the Arbitration Court of Turkmenistan in connection with aforementioned decision to suspend BCTI’s licenses. In addition actions were brought by BCTI in the International Court of Arbitration at the International Chamber of Commerce against TurkmenTelecom and Altyn Asyr – both state-owned telecom operators, in connection with their alleged termination of the interconnection agreements with BCTI. MTS management is continuing negotiations with the Ministry of Communications and officials of the Government of Turkmenistan to resolve the situation amicably and continue its operations in Turkmenistan.

As was stated previously, the Company at all times had reasons to believe that the Agreement would be extended and had approached the Ministry of Communications within the required timeframe to formalize the extension. However, the Ministry of Communications failed to grant the extension in accordance with the terms of the Agreement.

In any event, it is the Company’s opinion that the expiration of the Agreement does not preclude MTS from continuing its operations in Turkmenistan nor can any alleged termination of the Agreement serve as the basis for suspension of BCTI’s licenses, and that the notice must have been given as a result of misinterpretation of local laws and regulations by the Ministry of Communications of Turkmenistan.

The Company shall vigorously defend its legal rights and investment interests.