OREANDA-NEWS. July 24, 2012. Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications operator in Russia and the CIS, announces that it has suspended its services in Uzbekistan upon receipt of an order from the Communications and Information Agency of Uzbekistan informing MTS of the temporary suspension of the operating license of Uzdunrobita FE LLC (“Uzdunrobita”), MTS’s wholly owned subsidiary in Uzbekistan, for a period of 10 business days.

In accordance with the order, MTS ceased providing communication services on its networks to its 9.5 million customers at 18.00 on July 17, 2012. Notifications were made to subscribers prior to the cessation of service.

MTS states that as of July 17, 2012, Uzdunrobita has promptly and fully complied with all orders and requirements of the State Inspection of Communication of Uzbekistan (SIC), in particular regarding the operation of base stations and fiber-optic communication lines. MTS unequivocally believes that the suspension of the license is without proper basis and constitutes a breach of MTS’s rights under local and international law.

The actions of the regulatory authorities of Uzbekistan in conjunction with synchronous inspections of the company by several superivsing agencies are being carried out in in direct violation of local regulations and complemented with the use of tactics of intimidation, including the detainment and arrest of employees of Uzdurobita, all of which can be interpreted as an unwarranted attack on the business of a Russian investor.

As of July 17, 2012, Uzdunrobita has not been presented with any formal findings or claims in connection with any violations discovered as the result of comprehensive audits of the company’s financial and economic activity carried out by investigative authorities in Uzbekistan. Uzdunrobita has been working in Uzbekistan in strict accordance with applicable laws and regulations. The company has been subject of regularly scheduled audits of the financial and economic activities both prior to and since its acquisition by MTS in 2004. At no time did any audit reveal any significant violation by Uzdunrobita of the laws of Uzbekistan, in particular with respect to tax, foreign exchange and licensing requirements.

MTS is pursuing all necessary legal means to protect its rights and the rights of its employees. MTS has appealed to the government of the Republic of Uzbekistan to take action to prevent gross violations, which have arisen during the investigation into the company’s financial and operating activities, of both local laws and international treaties protecting rights of foreign investors.

In 2011, Uzdunrobita contributed 3.5% to the revenues and 4.5% to the OIBDA of MTS Group respectively.