MTS and the Republic of Uzbekistan Sign Settlement Agreement

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31 July 2014

Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” or the “Company” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces the signing of a settlement agreement with the Republic of Uzbekistan. According to the terms of the agreement the Company intends to resume operations in Uzbekistan through a joint venture with the government of Uzbekistan.

The signed agreement provides for establishment of a joint venture (“the Operator”) with MTS holding a 50.01% in the charter capital of the Operator while the remaining 49.99% will belong to a state-owned unitary enterprise established and managed by the State committee for communications, development of information systems and telecommunications technologies of the Republic of Uzbekistan. The Joint venture will operate on the basis of assets, equipment and infrastructure, which were previously owned by Uzdunrobita FE LLC, a former subsidiary of MTS in Uzbekistan, and which will be transferred to this newly established joint venture.

The parties intend to finalize all procedures stipulated in the Settlement agreement, and to ensure commercial launch of the Operator`s mobile network by the end of 2014.

According to the Settlement agreement, the authorities of the Republic of Uzbekistan will grant the new operator 2G, 3G and LTE licenses, provide necessary frequencies and numbering capacity, ensure lease agreements for communication channels and issue all permissions required for the joint venture to operate and offer full telecommunications services throughout Uzbekistan.

Within the scope of fulfillment of the terms and conditions set out in Settlement agreement and transfer of a stake in the Operator to MTS the parties will submit a joint application to discontinue ongoing legal proceedings in the International Center for Settlement of Investment Disputes, Member of the World Bank Group (ICSID).

The Settlement agreement is governed by English law and provides for resolution of any disputes arising out of the Settlement agreement in the International Court of Arbitration under International Chamber of Commerce in Paris (ICC).

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For further information, please contact in Moscow:
Joshua B. Tulgan
Director, Department of Corporate Finance and Investor Relations
Mobile TeleSystems OJSC
Tel: +7 495 223 2025
E-mail: ir@mts.ru

Learn more about MTS. Visit the official blog of the Investor Relations Department at www.mtsgsm.com/blog/

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Mobile TeleSystems OJSC ("MTS") is the leading telecommunications group in Russia, Сentral and Eastern Europe, offering mobile and fixed voice, broadband and pay TV in one of the world's fastest growing regions. Including its subsidiaries, the Group services over 100 million mobile subscribers. The Group has been awarded GSM licenses in Russia, Ukraine, Armenia, Turkmenistan and Belarus, a region that boasts a total population of more than 200 million. Since June 2000, MTS' Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT). Additional information about the MTS Group can be found at www.mtsgsm.com.

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Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might,” and the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not undertake or intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, specifically the Company’s most recent Form 20-F. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the severity and duration of current economic and financial conditions, including volatility in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of Russian, U.S. and other foreign government programs to restore liquidity and stimulate national and global economies, our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so, strategic actions, including acquisitions and dispositions and our success in integrating acquired businesses, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures, rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, governmental regulation of the telecommunications industries and other risks associated with operating in Russia and the CIS, volatility of stock price, financial risk management and future growth subject to risks.

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