OREANDA-NEWS. On 18 April 2008 was announced, that Mobile TeleSystems OJSC, announced its consolidated US GAAP financial results for the three months (unaudited) and full year ended December 31, 2007.

Key Financial Highlights of FY 2007

• Consolidated revenues up 29% y-o-y to \\$8,252 million
• Consolidated OIBDA1 up 31% to \\$4,223 million y-o-y with 51.2% OIBDA margin
• Consolidated net income up 93% year on year to \\$2,072 million
• Free cash-flow2 generation of \\$964 million

Key Corporate and Industry Highlights

• Allocation of 3G licenses in Russia, Uzbekistan and Armenia
• Countrywide rebranding of operations in Ukraine
• Launch of a CDMA network in Ukraine
• Entry into Armenia through acquisition of leading operator, K-Telecom (VivaCell)
• Launch of Blackberry enterprise service in Ukraine and Russia (2008)
• Payment of \\$747 million dividend and adoption of MTS Dividend Policy
• Acquisition of Bashcell, a small Russian regional operator
• Consolidation of ownership stake in Uzdunrobita (MTS Uzbekistan)
• Adoption of employee remuneration program for over 420 managers

Group Outlook for 2008

• Group revenue growth of 25%
• Group OIBDA margin of 50%
• Group CAPEX of \\$2.5 bn

Leonid Melamed, President and Chief Executive Officer, highlighted, "2007 was another year of strong growth and enhanced profitability. In successfully implementing our corporate strategy, we have realized even stronger growth in our financial position and enhanced our leadership in the region. Given our solid foundation and record of success, we are confident that 2008 will continue to provide opportunities to further develop our business and generate greater returns for shareholders.

Group Operating Review

Market Growth

Each market of operation reporting increased mobile penetration7 in 2007:

• Up from 114% to 119% in Russia;
• Up from 115% to 120% in Ukraine;
• Up from 16% to 22% in Uzbekistan;
• Up from 6% to 7% in Turkmenistan;
• Up from 69% to 73% in Belarus.

Subscriber Development

The Company added approximately 4.0 million new customers during the fourth quarter of 2007 on a consolidated basis that were all added organically. During the quarter MTS added:

• 3.0 million subscribers in Russia;
• 0.1 million subscribers in Ukraine;
• 0.5 million subscribers in Uzbekistan;
• 67 thousand subscribers in Turkmenistan;
• 0.3 million subscribers in Armenia.

Our Belarus operations added 135.3 thousand subscribers during the quarter. Since the end of the fourth quarter to March 31, 2008, MTS has organically added a further 2.97 million users, expanding its consolidated subscriber base to 84.94 million.

Market Share

MTS was able to maintain its leading position in the majority of its markets of operation during 2007. At the end of the fourth quarter, MTS’ subscriber market share:

• Maintained at 33% in Russia;
• Declined from 37% to 36% in Ukraine;
• Maintained at 54% in Uzbekistan;
• Increased from 86% to 88% in Turkmenistan;
• Reached 74% in Armenia.
In Belarus, the market share declined slightly to 53% from 54%.

Customer Segmentation

Subscriptions to MTS’ pre-paid tariff plans accounted for 86% of gross additions in Russia and 96% in Ukraine in the fourth quarter. At the end of the fourth quarter 2007, 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 remained at 92%.

Group Financial Position

MTS’ expenditure on property, plant and equipment in the fourth quarter totaled approximately \\$581 million, of which \\$386 million was invested in Russia, \\$153 million in Ukraine, \\$4 million in Uzbekistan, \\$27 million in Turkmenistan and \\$11 million in Armenia. The Company’s expenditure on property, plant and equipment for the full year 2007 totaled approximately \\$1,317 million, of which \\$740 million in Russia, \\$519 million in Ukraine, \\$16 million in Uzbekistan, \\$32 million in Turkmenistan and \\$11 million in Armenia.

MTS spent approximately \\$133 million on the purchase of intangible assets during the fourth quarter, of which \\$105 million was spent in Russia, \\$16 million in Ukraine, \\$9 million in Uzbekistan and \\$3 million in Armenia. The Company spent approximately \\$222 million on the purchase of intangible assets during the full year 2007, of which \\$179 million in Russia, \\$25 million in Ukraine, \\$14 million in Uzbekistan and \\$3 million in Armenia.

As of December 31, 2007, MTS’ total debt16 was at \\$3.4 billion, resulting in a ratio of total debt to OIBDA of 0.8 times. Net debt amounted to \\$2.8 billion at the end of the quarter and the net debt to OIBDA of 0.7 times.