Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, announces that on February 9, 2012, MTS received a Request for Arbitration from Mobile TeleSystems Finance SA (“MTS Finance”), wholly owned subsidiary of MTS, which has initiated an arbitration process under a loan agreement ("Loan Agreement") between the parties dated January 28, 2005. Under the terms of the Loan Agreement, MTSF lent $400 million to MTS. MTS Finance seeks the payment of all sums due to it under the Loan Agreement. MTS agrees that arbitration is the correct forum for any dispute between the parties but strongly denies that any sum is still owed by it to MTS Finance.

The arbitration will be conducted under the Rules of the London Court of International Arbitration.

In disputing any liability to MTS Finance, MTS will rely on its redemption of a $400 million Eurobond issued by MTS Finance, which matured on January 28, 2012, by making a payment as guarantor under the terms of the Indenture. The sum lent to MTS by MTS Finance under the Loan Agreement constituted the proceeds of this Eurobond issue. In the ordinary course and under the circumstances, MTS Finance may have written off any sum it considered it was owed. However, the position between MTS and MTS Finance in relation to the Loan Agreement (including the availability of a off-set) needs formally to be resolved to understand what assets of MTS Finance could be available in the event a separate LCIA award in favor of Nomihold Securities Inc. (made on November 11, 2010 and declared final on January 5, 2011) is held to be enforceable against MTS Finance.