Moscow, Russia – August 8, 2005 – Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, announced today that its Sistema Mass Media business has acquired 100% minus 1 share of Esta for a cash consideration of approximately US$ 8.6 million. Esta operates cable TV networks in Tver, Kaluga and three cities in the Arkhangelsk Region (Severodvinsk, Koryazhma and Mirny).

“The acquisition of Esta is a logical step in the further development of Sistema’s media assets,” commented Alexander Leiviman, CEO of Sistema Mass Media.

Esta’s networks are based on the MMDS technology and were rolled out between 1999 and 2004. With approximately 217,000 subscribers, the company is the market leader in each of the regions in which it operates. Sistema Mass Media acquired 50.05% of the company’s shares from individual investors and 49.95% from the European Bank for Reconstruction and Development.