Sistema opens office in India

Honorable Prime Minister of Russia inaugurates the Sistema Office

Mumbai, India - February 12, 2008 - Sistema (LSE: SSA), the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector, today opened its inaugural Indian office in New Delhi. The Sistema office was inaugurated by the Honorable Prime Minister of Russia, Mr. Victor Zubkov in the presence of Mr. Vladimir Evtushenkov, Chairman, Sistema JSFC and Mr. Alexander Goncharuk, President & Chief Executive Officer, Sistema JSFC.

Sistema is the first private Russian business to operate in India since the break up of the Soviet Union. The office is a contact point representing the whole range of Sistema's diverse portfolio of businesses. It is located over two floors in the Russian Chamber of Commerce which is part of the Diplomatic Enclave.

Vladimir Evtushenkov, Chairman of the Board, commented: "India is one of the fastest growing economies in the world and has a population of over one billion people. It is a key market for us and offers immense business opportunities. We intend to develop a number of our businesses into India, in line with our strategy to expand our operations internationally."

Alexander Goncharuk, President and Chief Executive Officer, added: "India is one of the most attractive markets in the world, with accelerating productivity and consumption levels, as well as rapidly developing infrastructure. We are a strategic investor, and will initially focus on building out an integrated national telecommunications network and providing our Indian customers with enhanced telecommunications services, depending on the spectrum allocation provided by the Department of Telecommunications (DoT). We also see considerable potential to build businesses in other sectors, and to bring our extensive experience in areas such as research and development, technology, infrastructural projects, healthcare and tourism."

In September 2007, Sistema acquired a 10% stake in Shyam Telelink Ltd., the telecommunications company which provides fixed-line and mobile telecommunication services in Rajasthan. This was followed by the signing of a share purchase agreement in October 2007 for the acquisition of an additional 41% stake. The deal was closed in January 2008, resulting in Sistema raising its stake to 51% in Shyam Telelink.

In January 2008, Shyam Telelink was awarded unified telecommunication licenses for provision of fixed-line and cellular services in 21 Indian circles. The company now holds licences, including those already held in Rajasthan, to provide pan-India services. The signing of license agreements and obtaining relevant frequencies from the Indian Department of Telecommunications will be finalised in accordance with Indian regulations. The timing of frequency allocation has not been determined and it is not defined when the frequencies will be assigned.

About Sistema

Sistema is the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector and has over 80 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 9.6 billion for the first nine months of 2007, and total assets of US$ 24.2 billion as at September 30, 2007. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS) and the Moscow Interbank Currency Exchange (MICEX), and under the symbol "SIST" on the Moscow Stock Exchange (MSE).