Moscow, Russian Federation – Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces that it has reached an agreement with Gazprombank to reduce the interest rates on the outstanding loans.

The interest rate on the EUR 100 million credit facility with maturity in September 2012 was reduced from an annual rate of 8% to 7%. The interest rate on the facility in the amount of RUB 6.46 billion with maturity in September 2012 was reduced from an annual rate of 13% to 10.95%. The Company also reduced the interest rate on the revolving credit line in the amount of EUR 100 million with maturity in September 2012 from 8% to 7%.

The reduction of interest expenses is part of the Company’s strategy at optimizing its debt profile. MTS aims to continue negotiating with the major lenders to further lower the Company’s interest exposure.