Moscow, Russia — June 27, 2005 — Mobile TeleSystems OJSC (“MTS” — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has acquired a 51% stake in Barash Communications Technologies, Inc. (BCTI), a U.S. company that is the leading mobile phone operator in the Republic of Turkmenistan.
MTS acquired a 51% controlling stake in BCTI, incorporated in the United States, from the founders of the company for $28.05 million with an agreement to increase its ownership to 100% within the next eight months, subject to certain conditions. The price of the remaining 49% stake will depend on the operating and financial performance of the company, but will not exceed $26.95 million.
BCTI’s branch in Turkmenistan holds GSM-900/1800 and AMPS licenses for the entire territory of the country (population: 6.6 million1). Mobile penetration in Turkmenistan is less than 1% and fixed line penetration is estimated at around 6%2. As of the beginning of June 2005, the company provides services to 59,100 subscribers (57,400 GSM; 1,700 AMPS) and is the leader of the two current GSM providers in the country with a 97% market share3. The network is based on Siemens equipment.
In 2004, BCTI’s revenues4 totaled $12.0 million. Average monthly revenue per user (ARPU) for 2004 amounted to approximately $31. The company does not have any debt.
“MTS’ entry into the Turkmen market is a significant step in implementing our strategy of geographical expansion into neighboring countries with high growth potential for the mobile industry. The experience we have gained in developing modern telecommunications infrastructure and providing first rate services will be fully utilized in Turkmenistan,” said Vassily Sidorov, President and CEO of MTS.
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According to the National Institute of Government Statistics of Turkmenistan as of June 1, 2005. |
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According to the World Fact Book of the Central Intelligence Agency. |
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According to BCTI estimates. |
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As reported in the statutory financial statements of the Turkmen Branch (operating entity) of BCTI, which were prepared in accordance with Turkmen accounting regulations. These amounts may differ to amounts reported under accounting principles generally accepted in the United States.
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For further information contact:
Mobile TeleSystems, Moscow
Andrey Braginski, Investor Relations
tel: +7 (095) 911-65-53
e-mail: ir@mts.ru
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