MOSCOW, - JUNE 27, 2007 - MOBILE TELESYSTEMS OJSC ("MTS" - NYSE: MBT), THE LARGEST MOBILE PHONE OPERATOR IN RUSSIA AND THE CIS, ANNOUNCES THAT THE COMPANY'S BOARD OF DIRECTORS HAS APPROVED AN EMPLOYEE REMUNERATION PROGRAM.

The employee motivation and retention program consists of two portions: a performance-based monetary award and a phantom share program based upon MTS' American Depositary Receipts (ADRs).  It will apply to up to 420 top- and mid-level managers of MTS per year and involve only current or future MTS employees.  Reward periods for the phantom program will extend through 2011, while vesting periods could last up to two years.  It is estimated that the cost of the program will be roughly $150 million, an amount which could substantially differ depending on the market value of the ADRs at the time of exercise.  The total number of phantom units involved will be the equivalent of 3.6 million ADRs.  All compensation will be made in cash.

Remarked Helmut Reuschenbach, Chairman of the Remuneration and Appointments Committee of MTS OJSC Board of Directors, "This is an important step in strengthening MTS' ability to attract and retain the best people.  We believe aligning employee interests with those of the Company's stakeholders best ensures the continued growth and development of the business."