OREANDA-NEWS. December 18, 2007. Mobile TeleSystems OJSC ("MTS" – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announced that it has acquired 100% of Bashcell, a mobile phone operator in Russia's Volga region.

MTS acquired a 100% stake in Bashcell from Bashneft and local private companies for $38 million, a sum that includes the assumption of $32 million in debt.

"The acquisition helps MTS to further solidify its leading position in Bashkortostan by increasing its market share to 39%. The Company is continuing to execute on its 3+2 strategy in particular consolidation of the Russian mobile phone market and expansion of operations in the regions," commented Mr. Mikhail Shamolin, Head of MTS Russia.

Ms. Svetlana Saprina, acting General Director of Bashcell highlighted, "This is an opportune time to align with Russia's leading operator in order to bring better service, quality and a wide variety of products to our customers."

Bashcell is the GSM-1800 mobile services provider in the Republic of Bashkortostan, an oil-rich and heavily industrialized portion of Russia's Volga region. It boasts a population of 4.1 million. The company provides service to roughly 142,000 subscribers, which constitutes approximately 3% of the market. Mobile penetration in the region is 102.4%. The company is also licensed to provide DAMPS, zone, fixed-line, data transmission and telematic services.

According to the Russian Accounting Standards (RAS), revenues in 2006 amounted to $11 million with an EBITDA margin of 25%; the company’s current average monthly revenue per user (ARPU) is $6.6. Revenues for the first six months of 2007 were $8 million.