OREANDA-NEWS. June 8, 2012. Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, and Sistema JSFC ("Sistema") (LSE: SSA), the largest diversified publicly-traded investment company in Russia and the CIS, announce that they have agreed to join forces in developing and managing the multimedia content portal Stream.ru (formerly Omlet.ru).

MTS and Sistema have signed a shareholders agreement with respect to the management of Stream LLC (“Stream”), which owns and manages Stream.ru. Sistema also contributed RUB 496.1 million into Stream’s charter capital and, upon completion of state registration procedures in accordance with Russian law, will own a 55% stake in Stream. This reduces MTS’s stake from 100% to 45%.

Stream LLC will operate under the Stream brand and be managed by Sistema’s subsidiary, Sistema Mass Media JSC, a leader on the Russian market in content production, distribution and advertising.

Andrei Dubovskov, President and Chief Executive Officer of MTS, highlighted, “MTS has developed one of the most successful start-ups in the Russian media content market. The time has come to elevate this project to the next stage, which requires attracting both financial resources and experience in media. Investments from Sistema and the unique expertise of Sistema Mass Media will enable Stream.ru to enhance its position in the fast-growing market for video and audio content. The structure of the transaction allows MTS to retain stake in the asset in order to leverage competitive advantages through the launch of media content services in mobile and fixed networks. We also expect the transaction to add momentum to the development of the legal content market in Russia.”

Mikhail Shamolin, President and Chief Executive Officer of Sistema, commented, “We envision Stream’s mission as becoming a universal point of access to a variety of media content. We want to leverage Sistema Mass Media’s expertise in production, aggregation and distribution of video content to create a leader in the media content market and increase shareholder value.”

Stream.ru is a multimedia content portal launched by MTS in 2009. Its content is available on Smart TV devices from Samsung, LG, Panasonic, Philips as well as smartphones, tablets. set-top boxes, and PCs. Stream’s portfolio includes about 7,000 movies and TV series episodes from leading international and Russia studios (Universal, Sony Pictures Entertainment, Warner Bros. Entertainment, Walt Disney, Bazelevs, Central Partnership). Monthly audience of the portal consists of more than 1.5 million unique visitors.