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JSFC Sistema (SSA)

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Friday 16 September, 2005

JSFC Sistema

Sistema Initiates Consolidation of Its Fixed Line

JSFC Sistema

Sistema (LSE:SSA), the largest private sector consumer services company in
Russia and the CIS, announced today that it intends to restructure its fixed
line telecommunications businesses as follows:

    --  Sistema's fixed-line telecommunications assets will be consolidated
        under Comstar UTS, a leading alternative fixed-line telecommunication
        company in the Moscow Region, which will be formed through a merger with
        Sistema's other fixed-line telecommunications subsidiaries MTU-Inform
        and Telmos. MTU Intel, an internet provider, will become a subsidiary of
        Comstar UTS.

    --  Sistema will transfer 56% of its shares in MGTS, the incumbent
        fixed-line telecommunication service provider in Moscow, to Comstar UTS
        in exchange for new shares in the combined entity.

The first legal steps in this consolidation process have been taken with the
change in the legal status of closed joint stock company ZAO Comstar to open
joint stock company OAO Comstar UTS and the acquisition of 20% stake in Telmos
by Comstar UTS from Sistema.

Additionaly, Sistema's Board of Directors has called an Extraordinary General
Meeting of Shareholders on October 21 to seek approval for the transfer of 56%
of its shares in MGTS to OAO Comstar UTS in exchange for new shares in the
combined entity.

For further information, please visit

Sistema is the largest private sector consumer services company in Russia and
the CIS, with over 50 million customers. Sistema develops and manages
market-leading businesses in selected service-based industries, including
telecommunications, technology, insurance, banking, real estate, retail and
media. Founded in 1993, the company reported revenues of US$ 5.7 billion for the
full year 2004, and total assets of US$ 8.8 billion as at December 31, 2004.
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 under the
symbol 'SIST' on the Moscow Stock Exchange (MSE).

Some of the information in this press release may contain projections or other
forward-looking statements regarding future events or the future financial
performance of Sistema. You can identify forward looking statements by terms
such as 'expect,' 'believe,' 'anticipate,' 'estimate,' 'intend,' 'will,'
'could,' 'may' or 'might' the negative of such terms or other similar
expressions. We wish to caution you that these statements are only predictions
and that actual events or results may differ materially. We do not intend to
update these statements to reflect events and circumstances occurring after the
date hereof or to reflect the occurrence of unanticipated events. Many factors
could cause the actual results to differ materially from those contained in our
projections or forward-looking statements, including, among others, general
economic conditions, our competitive environment, risks associated with
operating in Russia, rapid technological and market change in our industries, as
well as many other risks specifically related to Sistema and its operations.

    CONTACT: Sistema Investor Relations
             Alexei Kurach
             Tel: +7 095 229 2741
             Comstar UTS
             Veniamin Kofman
             Tel: + 7 095 956 2170
             Shared Value Limited
             Matthew Hooper
             Tel. +44 (0) 20 7321 5023

             NOTE TO EDITORS: In the email address for Veniamin
             Kofman, above, there is an 'underscore' between 'kofman'
             and ''vl'. This symbol may not appear properly in some