1. Company history

1. Company history


OJSC was established as Mobile TeleSystems Closed Joint-Stock Company by Moscow City Telephone Network Open Joint Stock Company (MGTS), Deutsche Telekom (DeTeMobil), Siemens and several other shareholders in October 1993. Four Russian companies owned 53% of the stock, whereas two German companies had 47%. At the end of 1996, AFK Sistema OJSC bought out the Russian shareholdersĺ stake and DeTeMobil bought the remaining stake from Siemens.

In 2000, Mobile TeleSystems CJSC and Russian Telephone Company CJSC merged to form Mobile TeleSystems Open Joint Stock Company. The same year, the Company entered the world stock markets. In June 30th, 2000, the stocks of MTS OJSC started trading on the New York Stock Exchange as American Depositary Shares (index MBT).

The core business of MTS is provisioning of mobile communication services. The objective of the Companyĺs business is earning profit through planning, marketing and operations of the cellular mobile communication network across the territories specified in the licenses issued by the Ministry of Communications of the Russian Federation.

Apart from building its proprietary networks, MTS acquires local mobile operators to develop their business and incorporate them into its integrated federal mobile communications network.

In 2009, MTS OJSC acquired the controlling stakes in COMSTAR-UTS OJSC, one of the lead fixed operators and Eurotel OJSC, a backbone provider, having thus enabled itself to provide the data services through the use of wire-based and wireless technologies.

Today MTS OJSC is the major Company belonging to the MTS Group alongside with its subsidiaries and affiliated companies. MTS Group is providing mobile and fixe-line telephony, national and international long-distance communication, data services, Internet access through wireless and wire-based solutions, including optical access and WiFi technologies and 3G networks. The CIS countries-based subsidiaries of MTS OJSC operate in Ukraine, Uzbekistan, Turkmenistan* , Armenia and the Republic of Belarus.

We are proud of our significant contribution toátheádevelopment of telecommunications in Russia andáits neighboring countries!

* On December 21, 2010, a licence for the provision of communication services was granted to Barash Communication Technologies (a subsidiary of MTS OJSC) pursuant to the letter of the Minister of Communications of Turkmenistan.

In this Annual Report the terms ôMTSö, ôthe Companyö, and ôthe Groupö shall mean the aggregate of the companies including MTS OJSC and its subsidiaries, and ôMTS OJSCö shall mean Mobile TeleSystems Open Joint Stock Company.

The indicators contained in this Annual Report are as of 31.12.2010, except where other periods or dates are expressly indicated.