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JSFC Sistema (SSA)

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Thursday 26 June, 2008

JSFC Sistema

1st Quarter Results - Replacement

Sistema
                  

The issuer advises that the following replaces the Sistema 1st Quarter Results
announcement released at 10.17 BST today.

There are additions to the ninth table.

All other details remain unchanged.

The full corrected version is shown below.


                Sistema Announces Unaudited Financial Results for
                      the Three Months Ended March 31, 2008

Sistema (the 'Group') (LSE:SSA), the largest diversified public corporation in
Russia and the CIS, which manages fast growing companies operating in the
consumer services sector, today announced its unaudited consolidated US GAAP
financial results for the three months ended March 31, 2008.

FIRST QUARTER HIGHLIGHTS

    --  Consolidated revenues up by 39.7% year on year to US$ 3.8 billion

    --  OIBDA up 31.8% year on year to US$ 1.4 billion and OIBDA margin of 38.2%

    --  Operating income up 21.0% year on year to US$ 881.3 million and
        operating margin of 23.3%

    --  Income from continuing operations increased by 79.7% year on year to US$
        400.8 million

    --  Total assets up by 40.4% year on year to US$ 30.3 billion

Leonid Melamed, President and Chief Executive Officer, commented: 'Sistema
delivered solid financial results in the first quarter of 2008 which demonstrate
strong fundamentals of the Group and its underlying businesses. We intend to
further strengthen Sistema's position in the Russian and international markets
as a preeminent consumer services corporation. Our goal, which is branded '5 X 5
25', is to achieve Return on Invested Capital for the Sistema Group of above
25% within the 5-year period and maintain it at this level beyond. Our tools for
achieving this goal are:

    --  Continued increase in the value of all assets of the Group justified by:

        --  Delivering robust and transparent financial results

        --  Demonstrating excellent management of assets, including through
            partnerships with leading companies in respective sectors

        --  Diversifying risks and attracting capital, including through
            established partnerships with market leaders

    --  Maintaining a strict fiscal discipline based on our TSR and ROIC-driven
        philosophy, as well as transparent KPIs for all public and non-public
        companies

    --  Simplifying the Group's capital structure

    --  Demonstrating leadership in the execution of our portfolio strategy and
        management of daughter companies

    --  Becoming best in class in investor relations and corporate governance
        areas, and continuing to work with our minority shareholders in an open
        and transparent manner.

We are confident about our future and committed to increasing the shareholders'
value.'

Effective January 1, 2008, Sistema has changed its accounting policy for the
treatment of acquired businesses. Previously, the year-to-date results of the
acquired companies were consolidated in the quarter of acquisition, with the
year-to-date earnings prior to acquisition being accounted for as minority
interests in the consolidated income statement. Sistema now only consolidates
the revenues and expenses of the acquired companies from the date of
acquisition. The revised treatment improves the comparability of Sistema's
results, both with prior reporting periods and with its peer companies. All
comparative historic information in the income statement has been restated to
conform to the new accounting policy. Therefore, unaudited results for the first
and the fourth quarters of 2007 were presented as if the new policy had been
followed in 2007.

FINANCIAL SUMMARY(1)

-0-
*T
                                              Year on         Quarter
(US$ millions)                1Q 2008 1Q 2007    Year 4Q 2007      on
                                               Change          Quarter
                                                                Change
----------------------------- ------- ------- ------- ------- --------
Revenues                      3,780.4 2,706.0   39.7% 4,159.5   (9.1%)
OIBDA(2)                      1,444.0 1,095.5   31.8% 1,433.6     0.7%
Operating income                881.3   728.5   21.0%   867.0     1.7%
Income from continuing
 operations                     400.8   223.0   79.7%   472.2  (15.1%)
Basic and diluted earnings
 per share (US cent)              4.3     8.0 (46.0%)     5.1  (15.3%)
*T

Sistema's consolidated revenues increased by 39.7% year on year in the first
quarter of 2008, while declining by 9.1% quarter on quarter compared to the
fourth quarter of 2007. Sistema's results in the first quarter reflected high
levels of revenue growth in the Group's Banking, Retail, Real Estate, Tourism
and Healthcare segments combined with a strong performance in the
Telecommunications segment. Non-telecommunications segments accounted for 26.8%
of the Group consolidated revenues in the first quarter, compared to 23.7% for
the corresponding period of 2007 and 32.2% in the fourth quarter of 2007. The
organic year on year growth for the first quarter of 2008 (excluding businesses
acquired or divested since the end of the first quarter of 2007) was 35.0% and
amounted to US$ 947.1 million.

Group OIBDA increased by 31.8% year on year in the first quarter of 2008, and
rose by 0.7% quarter on quarter compared to the fourth quarter of 2007. The
Group's OIBDA margin increased from 34.5% to 38.2% quarter on quarter, as a
result of the sound momentum in MTS' operations, robust performance in the
Group's Banking segment and improved results in the Technology segment. The
Group's OIBDA margin decreased from 40.5% to 38.2% year on year in the first
quarter primarily as a result of the increase of the share of
non-telecommunications revenues in the Group's results. The rise in selling,
general and administrative expenses in the Telecommunications segment has also
contributed to the decrease in OIBDA margin. MTS demonstrated sustained growth
of 30.2% year on year in OIBDA in the first quarter in 2008 with an OIBDA margin
of 49.4% as a result of the continued increase in usage and ARPU levels in its
Russian operations. Comstar UTS' OIBDA increased by 27.1% year on year in the
first quarter with an OIBDA margin of 40.8% as a result of high consumer demand
for the MGTS unlimited tariff plan for regulated residential voice services
introduced in February 2007, as well as the revenue boost from fixed-to-mobile
calls and regions. Group OIBDA in the first quarter was, however, adversely
impacted by operating losses in the Retail and Tourism segments.

Group operating income was up 21.0% year on year in the first quarter, and by
1.7% quarter on quarter. The Group's operating margin was 23.3% in the first
quarter of 2008, compared to 20.8% in the fourth quarter of 2007 and 26.9% in
the previous period of 2007.

Depreciation and amortization expense was up 53.3% year on year to US$ 562.7
million in the first quarter, following the 48.0% growth in depreciable and
amortizable assets of the Group.

Selling, general and administrative expenses increased by 50.8% year on year to
US$ 798.6 million in the first quarter as a result of the corresponding growth
of the business and the impact of rising inflation. Selling, general and
administrative expenses decreased by 13.9% quarter on quarter, compared to the
fourth quarter of 2007.

The effective tax rate was 25.7% for the first quarter of 2008, compared to
32.0% in the first quarter of 2007 and 21.3% in the fourth quarter of 2007.

The income from continuing operations nearly doubled year on year in the first
quarter as a result of the Group's strong operating performance while declining
15.1% quarter on quarter impacted by the revaluation effect from Comstar UTS'
call and put option agreement in the fourth quarter of 2007.

The net income decreased by 47.5% year on year to US$ 398.7 million due to the
impact of US$ 521.9 million gain on the sale of the Group's stake in ROSNO in
the first quarter of 2007.

The Group reported a 46.0% year on year decrease in basic and diluted earnings
per share from US cent 8.0 to US cent 4.3 for the first quarter of 2008.

OPERATING REVIEW(3)

TELECOMMUNICATIONS

-0-
*T
                                              Year on         Quarter
(US$ millions)                1Q 2008 1Q 2007   Year  4Q 2007      on
                                               Change          Quarter
                                                                Change
------------------------------------- ------- ------- ------- --------
Revenues                      2,770.5 2,066.8   34.1% 2,693.1     2.9%
OIBDA                         1,372.5 1,081.4   26.9% 1,261.5     8.8%
Operating Income                860.7   743.1   15.8%   738.9    16.5%
Net Income(4)                   364.6   227.3   60.4%   266.9    36.6%
*T

The Telecommunications segment, which comprises MTS, the largest mobile phone
operator in Russia and the CIS, and Comstar UTS, the leading fixed line
telecommunications operator in Russia and the CIS, achieved 34.1% year on year
revenue growth in the first quarter of 2008 and 2.9% quarter on quarter
increase. The segment accounted for 73.2% of the Group's consolidated revenues
in the first quarter of 2008 and included for the first time the financial
results of Shyam Telelink, a fixed and mobile services provider in India. MTS
continued to be the main contributor to the segment revenues and accounted for
85.4 % of the segment's revenue in the first quarter.

MTS added around 3 million subscribers during the first quarter of 2008
resulting in the total consolidated base of approximately 84.9 million customers
as at March 31, 2008. MTS generated 36.6% year on year revenue growth for the
first quarter from US$ 1,741.3 million to US$ 2,379.2 million. This growth
reflected an increase in average monthly service revenue per subscriber ('ARPU')
in Russia from US$ 8.2 in the first quarter of 2007 to US$ 10.0 in the first
quarter of 2008. Russian subscribers' monthly Minutes of Use (MOU) increased to
193 in the first quarter of 2008 from 134 in the first quarter of 2007. In the
first quarter of 2008 MTS' revenues increased by 2.3% quarter on quarter to US$
2,379.2 million from US$ 2,326.4 million.

MTS' OIBDA, as a result of the robust ARPU development combined with the organic
growth of its subscriber base, rose by 30.2% year on year and 4.3% quarter on
quarter to US$ 1,175.5 million in the first quarter. The OIBDA margin in the
first quarter was 49.4% compared to 51.9% a year ago as a result of the rising
interconnect costs and costs of accommodating new subscribers in its Russian
customer base. The OIBDA margin was 48.4% in the fourth quarter of 2007.

Comstar UTS generated 26.8% year on year revenue growth in the first quarter,
from US$ 328.9 million to US$ 417.0 million. This growth reflected continued
high consumer demand for MGTS's unlimited tariff plan for regulated residential
voice services, as well as the continuing revenue boost from fixed-to-mobile
calls and increasing contribution from the regions. The results include for the
first time contributions from Digital Telephone Networks South (DTN) and
Regional Technical Centre (RTC), which were acquired in the fourth quarter of
2007. Comstar' revenues increased by 3.8% quarter on quarter to US$ 417.0
million from US$ 401.6 million. Comstar UTS' Moscow broadband subscriber base
grew by 83% year on year in the first quarter to 799,000 customers, including
750,000 residential subscribers. This growth was driven primarily by the
continuing success of the 'Broadband in Every Home' campaign launched in
November 2007 and the active engagement of retail chains at the point of sale.
The number of triple play subscribers in Moscow increased by 30% year on year to
134,000 households.

Comstar UTS' OIBDA increased by 27.1% year on year and 20.4% quarter on quarter
to US$ 170.2 million in the first quarter with an OIBDA margin of 40.8% compared
to 40.3% a year ago and 40.7% for the fourth quarter of 2007.

Shyam Telelink Ltd. ('Shyam Telelink') contributed US$ 7.5 million to the
segment's revenues following the consolidation of Shyam Telelink results
starting from January 2008.

Segment OIBDA was up 26.9% year on year in the first quarter of 2008 and up 8.8%
quarter on quarter compared to the fourth quarter of 2007.

Segment's net income increased by 60.4% year on year in the first quarter of
2008 and by 36.6% quarter on quarter compared to the fourth quarter of 2007.

In February 2008, MTS consolidated the remaining 9.0% stake in its Omsk
subsidiary for US$ 16 million. The subsidiary provides GSM 900/1800 services
under the MTS brand and is one of the leading wireless service providers in the
Omsk region with a population of 2.1 million.

In March 2008, the Board of Directors of Comstar UTS approved the introduction
of a long-term incentive program for the Company's management team. The program
is set to run from April 1, 2008 with a two year vesting period. The eligible
program participants are determined by the Board of Directors every two years
starting from the launch of the program. A total of 151 managers are expected to
participate in the scheme during 2008-2010.

TECHNOLOGY

-0-
*T
                                               Year on        Quarter
(US$ millions)                      1Q     1Q    Year     4Q       on
                                   2008   2007  Change   2007  Quarter
                                                                Change
--------------------------------- ----- ------ ------- ------ --------
Revenues                          445.8  310.8   43.4%  603.9  (25.8%)
OIBDA                              20.6 (11.6)  278.1%    5.3   292.7%
Operating Income / (Loss)           5.3 (24.9)       - (10.7)        -
Net Loss                          (5.8) (23.0)       - (35.5)        -
*T

The Technology segment comprises SITRONICS, a leading provider of
telecommunications, IT and microelectronic solutions in Russia and the CIS, with
a growing presence in other EEMEA emerging markets. SITRONICS' revenues were up
43.4% year on year in the first quarter of 2008. The Information Technology
Solutions and Microelectronic Solutions divisions continued to demonstrate a
strong growth during the first quarter.

The segment produced OIBDA of US$ 20.6 million in the first quarter of 2008,
compared to OIBDA of US$ 5.3 million in the fourth quarter of 2007 and negative
OIBDA of US$ 11.6 million in the first quarter of 2007. The OIBDA margin
amounted to 4.6% in the first quarter compared to 0.9% in the fourth quarter of
2007.

In March 2008, SITRONICS acquired a 36% stake in Kvazar-Micro from Melrose
Holding Company for US$ 116.9 million. As a result of the transaction,
SITRONICS' share increased to 87% of Kvazar-Micro.

REAL ESTATE

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
----------------------------------- ----- ----- ------- ----- --------
Revenues                            141.6  34.5  310.5% 244.7  (42.1%)
OIBDA                                29.7   7.0  325.1% 120.9  (75.4%)
Operating Income                     24.5   4.1  496.3% 114.8  (78.7%)
Net Income                           21.0   4.7  347.1%  86.1 (170.7%)
*T

Revenues in Sistema Hals, a leading Moscow-based real estate development,
management and investment company, nearly quadrupled year on year in the first
quarter, primarily as a result of the strong growth in the real estate
development division. The division generated the majority of its revenue growth
from the sale of the 'Rochdelskaya 22' project, a building complex at '8 Marta
Street', as well as ongoing sales of 'Dnepropetrovskaya', 'Nahimovskiy',
'Michurinskiy' and 'Rublevskoe highway' residential developments. Segment
revenues declined 42.1% quarter on quarter.

Segment OIBDA more than quadrupled year on year in the first quarter to US$ 29.7
million with the OIBDA margin of 21.0% compared to 20.2% in the previous year.
OIBDA declined 75.4% quarter on quarter.

BANKING

-0-
*T
                                                  Year        Quarter
(US$ millions)                         1Q    1Q     on    4Q       on
                                      2008  2007   Year  2007  Quarter
                                                 Change         Change
------------------------------------ ----- ----- ------ ----- --------
Revenues                             151.1  79.8  89.3% 139.5     8.3%
OIBDA                                 36.2  10.5 246.3%  17.7   105.0%
Operating Income                      30.1   9.3 224.2%  14.2   112.8%
Net Income                            20.3   4.4 365.3%   7.5    93.6%
*T

The Banking segment comprises the Moscow Bank for Reconstruction and Development
(MBRD), the East-West United Bank (EWUB) and Dalcombank, which was consolidated
in the segment's operations in the end of 2007. The segment provides corporate
and retail banking services in Russia and Luxembourg. The segment revenues
nearly doubled year on year in the first quarter of 2008 and increased by 8.3%
quarter on quarter, as a result of the strong organic growth of the segment's
retail and corporate lending portfolios, as well as the above mentioned
acquisition of Dalcombank. The loan portfolio grew by 140.7% to US$ 3.6 billion
as at March 31, 2008, with Dalcombank contributing 27.7% of the overall growth,
compared to US$ 1.5 billion as at March 31, 2007. Interest income received from
retail and corporate lending more than doubled year on year, with Dalcombank
accounting for 29.1% of the growth, and was up 22.3% quarter on quarter to US$
128.8 million in the first quarter. Revenues from leasing activities doubled
year on year and were up 18.2% quarter on quarter to US$ 13 million in the first
quarter of 2008.

Segment OIBDA more than tripled year on year and increased 105.0% quarter on
quarter following the consolidation of Dalcombank in the end of 2007 and the
reversal of a part of the previously created obligatory reserves in the first
quarter of 2008 resulting from the change in the norms of deposition of
obligatory reserves.

The segment's retail business included 161 points of sales, including 69 points
of sales in Moscow and 92 points in 34 Russian regions as at March 31, 2008.
MBRD is pursuing a dynamic regional expansion strategy to offer retail lending
services through the opening of small format offices with minimal capital
expenditure.

RETAIL

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
---------------------------------- ------ ----- ------- ----- --------
Revenues                            147.6  86.9   70.0% 263.5  (44.0%)
OIBDA                              (16.1) (5.0)       -  45.1        -
Operating (Loss)/ Income           (20.4) (7.0)       -  40.7        -
Net (Loss)/ Income                 (18.4) (9.1)       -  29.6        -
*T

The Retail segment comprises Detsky Mir, the largest children's goods chain of
retail stores in Russia. Total revenues increased by 70% year on year and
decreased by 44% quarter on quarter, whilst retail revenues accounted for 91% of
total revenues for the first quarter and amounted to US$ 133.8 million.

Detsky Mir reported a net loss in the first quarter, which was largely due to
the significant expansion of the retail store network undertaken in the fourth
quarter of 2007 and the first quarter of 2008, and the fact that the first
quarter is a seasonally weaker period of the year.

The network of retail outlets grew by 30 stores to 97 in total as of March 31,
2008, while the aggregate retail space increased by 51% year on year to 177
thousand square metres.

As at June 26, 2008, Detsky Mir's retail network consisted of 103 retail outlets
located in 51 cities of Russia and the CIS, with total retail space of 186
thousand square metres.

In June 2008, Detsky Mir launched its first store in Ukraine as part of its CIS
expansion strategy.

MASS MEDIA

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
----------------------------------- ----- ----- ------- ----- --------
Revenues                             45.1  26.9   67.6%  41.6     8.6%
OIBDA                                10.2   5.0  102.0%  10.9   (6.6%)
Operating (Loss) / Income           (2.3)   1.3       -   0.5        -
Net (Loss) / Income                 (1.3) (0.2)       -   1.8        -
*T

The Mass Media segment, which comprises the Group's Pay-TV business, operating
under the brand name Stream-TV, as well as advertising, print and other media
operations, generated 67.6% year on year revenue growth in the first quarter of
2008, primarily as a result of the increase in Stream-TV and Internet ARPU and
robust subscriber growth. Segment revenues increased 8.6% quarter on quarter.
Stream-TV's revenues increased nearly 47.9% year on year to US$ 28.4 million in
the first quarter. Stream-TV subscriber base was up by 11.8% year on year to 1.8
million subscribers, while its Internet subscriber base has nearly doubled to
144 thousand subscribers and IP-telephony users increased to 10,200 during the
period. Combined Stream-TV ARPU increased from US$ 2.9 in the first quarter of
2007 to US$ 3.8, while Pay-TV ARPU increased from US$ 4 to US$ 4.9 during the
same period. Internet ARPU increased from US$ 13.5 in the first quarter of 2007
to US$ 16.3 in the first quarter of 2008.

CORPORATE AND OTHER

-0-
*T
(US$ millions)                                Year on         Quarter
                                    1Q    1Q     Year     4Q       on
                                   2008  2007   Change   2007  Quarter
                                                                Change
--------------------------------- ----- ----- -------- ------ --------
Revenues
 Radars and Aerospace              90.2  70.3    28.2%  167.8  (46.3%)
 Tourism                           72.7  48.6    49.7%   99.1  (26.6%)
 Pharmaceuticals                   14.1  17.2  (17.8%)   13.3     6.2%
 Healthcare Services               26.8   5.4   400.0%   22.8    17.7%
 Other                             32.7   8.5   260.0%   74.4  (56.0%)
--------------------------------- ----- ----- -------- ------ --------
Total                             236.5 150.0    57.7%  374.7  (14.9%)
OIBDA
 Radars and Aerospace              14.2  12.4    14.9%   16.2  (12.1%)
 Tourism                            1.8   6.4  (71.5%)    5.2  (64.8%)
 Pharmaceuticals                  (1.8)   3.5 (151.9%)  (2.0)  (11.0%)
 Healthcare Services                2.7   0.4   587.7%    2.9   (4.8%)
 Other                            (1.3) (9.6)        - (66.8)        -
--------------------------------- ----- ----- -------- ------ --------
Total                              15.6  13.0   232.3% (44.5)        -
*T

The Radars and Aerospace segment's revenues increased by 28.2% year on year in
the first quarter, as a result of an increase in the volume of services
performed under a number of government contracts. Revenues declined 46.3%
quarter on quarter while OIBDA decreased 12.1% quarter on quarter following the
completion of B2G contracts in the fourth quarter of 2007. RTI Systems' OIBDA
was up by 14.9% year on year in the first quarter with OIBDA margin of 15.8%
driven by robust operating results.

In March 2008, RTI Systems completed the sale of 100.0% in CJSC Sahles to CJSC
Saturn, a subsidiary of OPK Oboronprom, for a total cash consideration of US$
190 million. CJSC Sahles owned a 71.63% stake in OJSC Perm Motors Plant, as well
as controlling stakes in other entities which constitute the Perm Motors Group
('PMG').

The Tourism segment's revenues increased by 49.7% year on year in the first
quarter of 2008, primarily as a result of the strong performance of its tour
operating division. Revenues declined 26.6% quarter on quarter following
seasonally strong fourth quarter. The segment's sales turnover(5) more than
doubled year on year in the first quarter to US$ 119.7 million, following the
rapid development of the tour operating division very, particularly on routes to
Turkey and Egypt. The tour operating division accounted for 67% of segment
revenues in the first quarter of 2008 compared to 62% for the corresponding
period in 2007 and 76.1% in the fourth quarter of 2007. Segment OIBDA decreased
year on year and quarter on quarter following the dynamic growth of retail
network and expansion in the highly competitive outbound travel market. The
segment serviced 185 thousand customers in the first quarter of 2008 compared to
100 thousand for the corresponding period of 2007. The hotel group, which
comprises 9 hotels, increased the total number of rooms by 17.1% to nearly 2,455
rooms as of March 31, 2008.

The Pharmaceuticals segment's revenues declined 17.8% year on year as a result
of factory's reconstruction, however, revenues increased 6.2% quarter on
quarter. Segment OIBDA decreased year on year due to a one-off gain from the
sale of a building in the first quarter of 2007.

The Healthcare Services segment's revenues increased nearly fivefold year on
year and by 17.7% quarter on quarter following strong operational results and
acquisition of Family Healthcare Corporation in December 2007. The segment,
which comprises the Medsi and Medsi-II clinics, American Hospital Group,
Medexpress and Family Healthcare Corporation, is developing into a leading
private healthcare provider in Russia, with comprehensive medical care and a
chain of private clinics. In February 2008, Sistema completed the integration of
its Healthcare Services division's assets into the 'Medsi Group' Holding, 100%
owned by Sistema. Sistema transferred to Medsi Group a 20.0% stake in
MedExpress, which comprises 26 clinics in Moscow and the regions and an
ambulance service; 100% of American Hospital Group, a family clinic which
operates under the 'American Medical Centers' brand; and 53.3% stake in Medsi
clinic, an out-patient clinic for adults. Segment OIBDA increased nearly seven
times year on year in the first quarter of 2008 as a result of the growth in its
operations.

FINANCIAL REVIEW

Net cash provided by operating activities increased by 303.7% year on year to
US$ 863.3 million in the first quarter mainly due to the increase in the Group's
working capital.

Net cash used in investing activities totalled US$ 1,645.5 million in the first
quarter of 2008, while US$ 980.4 million of capital expenditure included US$
406.6 million for the purchase of licences by Shyam Telelink, compared to US$
378.0 million and US$ 420.5 million, respectively, for the corresponding period
of 2007. The Group spent US$ 703.3 million on the acquisition of businesses in
the first quarter, including US$ 423.1 million on purchase of an additional
0.55% stake in MTS, compared to US$ 39.0 million in the previous year.

Cash flows from financing activities amounted to US$ 732.4 million in the first
quarter of 2008, compared to US$ 703.4 million for the corresponding period of
2007. Major changes in the sources of financing in the first quarter included
RUB 6 billion (approximately US$ 251.6 million) corporate bond offering by
Sistema, US$ 495 million loans received by Shyam Telelink from ICICI Bank and
ABN AMRO Bank N.V., US$ 75 million loan received by SITRONICS from Dresdner Bank
AG.

In February 2008, MBRD securitised part of its car loan portfolio. This deal
provided the Bank with funding in the amount of RUB 1.5 billion (approximately
US$ 64 million). MBRD may increase the borrowing up to US$ 200 million in the
next 12 months.

The Group's cash balances stood at US$ 1,061.9 million as at March 31, 2008,
compared to a balance of US$ 1,061.7 million as at March 31, 2007. The Group's
net debt (short-term and long-term debt minus cash and cash equivalents)
increased to US$ 8,099.0 million as at March 31, 2008 compared to US$ 5,842.2
million as at March 31, 2007.

SIGNIFICANT EVENTS FOLLOWING THE END OF THE REPORTING PERIOD

Telecommunications

In June 2008, Comstar completed the acquisition of 100% of the share capital of
Interlink Group for a total cash consideration of RUB 200 million (approximately
US$ 8.5 million). The Group comprises Intersvyaz Service, the alternative
fixed-line telecommunications operator, and Inter-TV Media, the cable TV
operator, which operate under the unified brand 'Interlink' in Ryazan and the
Ryazan region.

In June 2008, Comstar commenced the merger of Comstar-Direct, a leading provider
of broadband internet access services in Moscow. Comstar currently owns 51.8% of
Comstar-Direct, with the remaining 48.2% owned by Sistema Mass Media.

In June 2008, Sistema increased its stake in Shyam Telelink from 72% to 73.71%
as a result of its participation in the charter capital increase of Shyam
Telelink in the total amount of US$ 470 million with Sistema's contribution
being US$ 348 million. During the same month, Sistema received radio frequencies
under CDMA 800 MHz in four additional Indian circles. Altogether Shyam Telelink
now has spectrum in 19 telecommunications circles, covering 27 Indian states
with a population of 1,066.5 million people (which comprise around 94.5% of the
Indian population).

In May 2008, Sistema signed an amendment to the call option agreement, which
gave it the right to accelerate the purchase of an additional 21% stake in Shyam
Telelink. In accordance with this amendment, Sistema has exercised a call option
and acquired the additional 21% stake in Shyam Telelink, increasing its stake
from 51% to 72%.

In May 2008, MTS' Board of Directors approved amendments to the employee
motivation and retention program that was adopted in June 2007 with reward
periods extending through 2011. As amended, the program will involve a total of
10,207,751 phantom and actual American Depositary Receipts (ADRs). The amended
program increases the share of individual employee's compensation dependent upon
the level of investment appeal of the Company as judged by growth in share price
combined with dividend payout, or total shareholder return (TSR), as well as the
realization of key strategic goals. Program participants become eligible for
their awards upon reaching an annual TSR level of not less than 15%. Prior to
its amendment, the program included 3.6 million phantom ADRs as well as
performance-based monetary awards that were independent of the stock price.

In May 2008, MTS' Board of Directors appointed Mr. Mikhail Shamolin as the
President and CEO of MTS. Mr. Shamolin has previously served as the Head of MTS
Russia.

In May 2008, Comstar signed a strategic agreement with FON Wireless Ltd.
('FON'), a developer of a shared wireless internet access network based on Wi-Fi
technology. Under the terms of the agreement, Comstar and FON will develop a
Wi-Fi internet access network. It will be created on the basis of the Comstar
subscriber base in Moscow and will, therefore, enable the local customers to
join the worldwide FON network. Within the framework of the project, Comstar
plans to establish 30,000 Wi-Fi access points in Moscow in 2008-2009.

In April 2008, Fitch Ratings assigned MTS a Long-term Issuer Default rating
(IDR) of 'BB+', National Long-term rating of 'AA(rus)' and Short-term IDR of 'B'
with a stable outlook.

Real Estate

In May 2008, Fitch Ratings confirmed a B+ credit rating for Sistema-Hals with a
negative outlook.

Corporate and Others

In June 2008, Sistema signed US$ 613.3 million syndicated multi-tranche loan
facility with ABN AMRO.

In May 2008, Sistema signed an agreement on cooperation with CPMIEC, the Chinese
National Precision Machinery Import & Export Corporation. The agreement aims to
develop cooperation on the Russian and Chinese markets, and also in third
countries in the sphere of high-technology and developers' services.

In May 2008, Sistema signed a Memorandum of Understanding with DAS Holding LLC,
an international investment holding company with headquarters in Abu Dhabi. The
main goal of the Memorandum is to develop the cooperation in various sectors of
the economy, such as investments into real estate and construction projects,
banking, medicine, tourism and the hotel business in Russia, the CIS and United
Arab Emirates.

In May 2008, Sistema's Board of Directors appointment Leonid Melamed as
President and Chief Executive Officer of Sistema with immediate effect. Mr
Melamed, the former CEO and President of Mobile TeleSystems ('MTS'), replaced
Alexander Goncharuk, who will continue to serve as First Deputy Chairman of
Sistema's Board of Directors. Mr Goncharuk has been a member of the Board of
Directors of Sistema since 1996.

In April 2008, Sistema repaid its US$ 350 million Eurobond issue. The Eurobond
issue was repaid upon its maturity in full using the Company's cash flows and
previously obtained debt financing.

In April 2008, Sistema Board of Directors recommended an annual dividend of RUB
2,512.5 million, (approximately US$ 106.4 million), for the year ended December
31, 2007 to holders of Sistema shares. The dividend, which amounts to a payment
of RUB 0.25 per share (approximately US$ 0.21 per Global Depositary Receipt), is
more than five times higher than the dividend paid for the same period of 2006.

Conference call information

Sistema management will host a conference call today at 9 am (New York time) / 2
pm (London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and discuss the
fourth quarter results.

The dial-in numbers for the conference call are:
UK/International: +44 20 7190 1232
US: +1 480 629 1990

A replay will then be available for 7 days after the conference
call. To access the replay, please dial:
UK/International: +44 20 7154 2833
US: +1 303 590 3030

PIN number: 3889255#

                                       ***

-0-
*T
For further information, please visit www.sistema.com or contact:

Sistema Investor Relations                             Shared Value Limited
Laila Simanova                                         Larisa Kogut-Millings
Tel: +7 495 730 66 00                                  Tel: +44 (0) 20 7321 5037
ir@sistema.ru                                          sistema@sharedvalue.net

Head of International Press Office
Kirill Semenov
Tel: +7 495 730 71 88
ksemenov@sistema.ru
*T

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 100 million customers. Sistema develops and manages market-leading
businesses in selected service-based industries, including telecommunications,
technology, banking, real estate, retail, media, tourism and healthcare. Founded
in 1993, the company reported unaudited revenues of US$ 3.8 billion for the
first quarter of 2008, and total assets of US$ 30.3 billion as at March 31,
2008. Sistema's shares are listed under the symbol 'SSA' on the London Stock
Exchange, under the symbol 'AFKS' on the Russian Trading System (RTS), under the
symbol 'AFKC' on the Moscow Interbank Currency Exchange (MICEX), 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. In addition, there is
no assurance that the new contracts entered into by our subsidiaries referenced
above will be completed on the terms contained therein or at all. 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.

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                          Jan - March    Jan - March
                                          2008           2007
                                          -------------  -------------

Sales                                    $    3,637,332 $    2,630,463
Revenues from financial services                143,098         75,493

                                          -------------  -------------
TOTAL REVENUES                                3,780,430      2,705,956
                                          -------------  -------------

Cost of sales, exclusive of depreciation
 and amortization shown separately below    (1,493,670)    (1,043,296)
Financial services related costs,
 exclusive of depreciation and
 amortization shown separately below           (55,127)       (31,329)

                                          -------------  -------------
TOTAL COST OF SALES                         (1,548,797)    (1,074,625)
                                          -------------  -------------

Selling, general and administrative
 expenses                                     (798,649)      (529,475)
Depreciation and amortization                 (562,732)      (367,026)
Provision for doubtful accounts                (30,294)       (22,321)
Other operating expenses, net                  (11,289)       (23,757)
Equity in net income of investees                21,673         36,511
Gain on disposal of interests in
 subsidiaries and affiliates                     30,957          3,216

                                          -------------  -------------
OPERATING INCOME                                881,299        728,479
                                          -------------  -------------

Interest income                                  21,370         20,752
Change in fair value of derivative
 instruments                                     14,369         13,500
Interest expense, net of amounts
 capitalized                                  (119,039)       (99,963)
Currency exchange and translation gain          196,785         31,821

                                          -------------  -------------
Income from continuing operations before
 income tax, equity in net income of
 energy companies in the Republic of
 Bashkortostan and minority interests           994,784        694,589
                                          -------------  -------------

Income tax expense                            (266,435)      (221,931)
Minority interests                       $    (369,916) $    (263,656)
Equity in net income of energy companies
 in the Republic of Bashkortostan, net of
 minority interest of $8,348 and $7,532,
 respectively                                    42,383         13,989

Income from continuing operations               400,816        222,991

(Loss)/Income from discontinued
 operations, net of income tax
 benefit/(expense) of $5,391 and
 ($2,207), respectively                         (4,194)            960

Gain from disposal of discontinued
 operations, net of income tax effect of
 $280 and $148,809                                2,053        521,963

NET INCOME                               $      398,675 $      745,914

Weighted average number of common shares
 outstanding                              9,278,010,358  9,365,757,000

Earnings per share, basic and diluted, US
 cent
Income from continuing operations                   4.3            2.4
Income from discontinued operations                   -            5.6
Net income                                          4.3            8.0
*T


UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND 2007
(Amounts in
thousands of U.S. dollars)

-0-
*T
                                                March 31,   December
                                                2008         31,
                                                            2007
                                                ----------  ----------

ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                    $ 1,061,937 $ 1,061,733
  Short-term investments                           984,016     909,224
  Loans to customers and banks, net              2,961,328   2,764,763
  Accounts receivable, net                       1,571,397   1,383,731
  Prepaid expenses, other receivables and
  other current assets, net                        994,880     950,104
  VAT receivable                                   383,121     435,245
  Inventories and spare parts                      885,221     780,193
  Deferred tax assets, current portion             290,767     213,633
  Assets of discontinued operations                      -     545,863

                                                ----------  ----------
     Total current assets                        9,132,667   9,044,489
                                                ----------  ----------

NON-CURRENT ASSETS:
  Property, plant and equipment, net            11,323,907  10,412,636
  Advance payments for non-current assets          313,045     284,396
  Goodwill                                       1,187,502     860,019
  Licenses, net                                  1,129,888     730,636
  Other intangible assets, net                   1,786,405   1,665,969
  Investments in affiliates                      1,432,438   1,352,972
  Investments in shares of Svyazinvest           1,550,499   1,485,378
  Loans to customers and banks, net of current
   portion                                       1,345,779   1,468,088
  Debt issuance costs, net                          98,893     101,904
  Deferred tax assets, net of current portion      139,832     108,637
  Other non-current assets                         813,739     881,534

                                                ----------  ----------
     Total non-current assets                   21,121,927  19,352,169
                                                            ----------

                                                ----------  ----------
TOTAL ASSETS                                   $30,254,594 $28,396,658
                                                ==========  ==========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                March 31,   December
                                                2008         31,
                                                            2007
                                                ----------  ----------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                             $ 1,443,215 $ 1,273,487
  Bank deposits and notes issued, current
   portion                                       2,477,948   2,101,084
  Taxes payable                                    380,535     223,791
  Deferred tax liabilities, current portion         91,761      77,893
  Subscriber prepayments, current portion          559,883     598,014
  Derivative financial instruments                  77,000     140,563
  Accrued expenses and other current
   liabilities                                   1,496,730   1,357,277
  Short-term loans payable                       1,104,401     724,905
  Current portion of long-term debt              1,174,245   1,517,902
  Liabilities of the discontinued operations             -     396,132

                                                ----------  ----------
     Total current liabilities                   8,805,718   8,411,048
                                                ----------  ----------

LONG-TERM LIABILITIES:
  Long-term debt, net of current portion         6,881,988   6,241,937
  Subscriber prepayments, net of current
   portion                                         138,365     134,280
  Bank deposits and notes issued, net of
   current portion                               1,035,770   1,266,925
  Deferred tax liabilities, net of current
   portion                                         473,841     428,030
  Postretirement benefits obligation                44,989      42,370
  Deferred revenue                                 145,298     139,984

                                                ----------  ----------
     Total long-term liabilities                 8,720,251   8,253,526
                                                ----------  ----------

                                                ----------  ----------
TOTAL LIABILITIES                               17,525,969  16,664,574
                                                ----------  ----------

Minority interests in equity of subsidiaries     5,324,464   4,987,220

Commitments and contingencies                            -           -

Puttable shares of SITRONICS                        87,625      86,100

SHAREHOLDERS' EQUITY:
  Share capital (9,278,328,668 and
   9,276,092,868 shares issued and outstanding
   as of March 31, 2008 and December 31, 2007,
   respectively, with par value of 0.09 Russian
   Rubles)                                          30,057      30,057
  Treasury stock (371,671,332 and 373,907,132
   shares as of March 31, 2008 and December 31,
   2007, respectively, with par value of 0.09
   Russian Rubles)                               (466,345)   (469,365)
  Additional paid-in capital                     2,439,069   2,439,069
  Retained earnings                              4,433,830   4,035,157
  Accumulated other comprehensive income           879,925     623,846

                                                ----------  ----------
TOTAL SHAREHOLDERS' EQUITY                       7,316,536   6,658,764

                                                ----------  ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $30,254,594 $28,396,658
                                                ==========  ==========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                       2008       2007
                                                  ---------  ---------
  CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                       $  398,763 $  745,914

  Adjustments to reconcile net income to net cash
   provided by operations:
    Depreciation and amortization                   562,732    367,026
    Gain from disposal of discontinued operations   (2,141)  (521,963)
    Loss/(gain) from discontinued operations          4,194      (960)
    Gain on disposal of long-term investments      (30,091)          -
    Minority interests                              378,264    271,188
    Equity in net income of investees              (72,404)   (58,032)
    Deferred income tax benefit                    (76,867)   (11,998)
    Change in fair value of derivative financial
     instruments                                   (14,369)   (13,500)
    Foreign currency transactions gain on non-
     operating activities                         (196,785)   (31,821)
    Debt issuance cost amortization                   6,031      8,615
    Non-cash compensation to employees of
     subsidiaries                                    10,839      1,664
    Gain on disposal of interests in subsidiaries
     and affiliates                                (30,957)    (3,216)
    Gain on disposal of property, plant and
     equipment                                     (12,401)    (1,257)
    Amortization of connection fees                (15,415)   (23,533)
    Provision for doubtful accounts receivable       30,294     28,745
    (Recovery of allowance)/allowance for loan
     losses                                        (18,774)        995
    Inventory obsolescence expense                      989          -

  Changes in operating assets and liabilities,
  net of effects from purchase of businesses:
    Trading securities                             (13,169)  (236,462)
    Loans to banks issued by the Banking segment    227,986  (219,665)
    Accounts receivable                           (181,124)     74,824
    VAT receivable                                   52,124     41,982
    Other receivables and prepaid expenses         (44,512)  (127,050)
    Inventories                                   (106,012)   (50,109)
    Accounts payable                              (176,658)     35,195
    Subscriber prepayments                         (18,631)   (61,363)
    Taxes payable                                   156,423  (115,989)
    Accrued expenses, subscriber prepayments and
     other liabilities                               42,303    116,429
    Postretirement benefit obligation                 2,619       (39)
                                                  ---------  ---------
    NET CASH PROVIDED BY OPERATING ACTIVITIES       863,251    215,620
                                                  ---------  ---------
*T

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                       2008       2007
                                                -----------  ---------
  CASH FLOWS FROM INVESTING ACTIVITIES:
    Payments for purchases of property, plant
     and equipment                                (631,416)  (332,657)
    Payments for purchases of intangible assets   (349,020)   (71,360)
    Payments for purchases of businesses, net
     of cash acquired                             (703,336)   (39,000)
    Proceeds from sale of subsidiaries, net of
     cash disposed                                  260,412    636,683
    Payments for purchases of long-term
     investments                                    (6,829)    (5,479)
    Payments for purchases of short-term
     investments                                  (139,536)  (212,306)
    Payments for purchases of other non-current
     assets                                        (74,931)  (105,551)
    Proceeds from sale of other non-current
     assets                                         119,697          -
    Proceeds from sale of property, plant and
     equipment                                       53,893      1,357
    Proceeds from sale of long-term investments      30,091     20,000
    Proceeds from sale of short-term
     investments                                     78,923     10,973
    Net increase in loans to customers of the
     Banking segment                              (283,468)  (280,629)
                                                -----------  ---------
  NET CASH USED IN INVESTING ACTIVITIES         (1,645,520)  (377,969)
                                                -----------  ---------

  CASH FLOWS FROM FINANCING ACTIVITIES:
    (Principal payments on)/proceeds from
     short-term borrowings, net                     310,789    208,800
    Net (decrease)/increase in deposits from
     customers of the Banking segment             (121,731)     70,954
    Net increase in promissory notes issued by
     the Banking segment                            267,439    157,028
    Proceeds from long-term borrowings, net of
     debt issuance costs                            999,036     75,690
    Debt issuance costs                             (3,020)      (525)
    Principal payments on long-term borrowings    (722,263)  (159,112)
    Principal payments on capital lease
     obligations                                      (852)    (7,713)
    Proceeds from capital transactions of
     subsidiaries                                         -    356,463
    Proceeds from sale of treasury shares             3,020          -
                                                -----------  ---------
  NET CASH PROVIDED BY FINANCING ACTIVITIES    $    732,418 $  701,585
                                                -----------  ---------

  Effects of foreign currency translation on
   cash and cash equivalents                   $     50,055 $    1,033

  INCREASE IN CASH AND CASH EQUIVALENTS        $        204 $  540,269

  CASH AND CASH EQUIVALENTS, beginning of the
   period                                         1,061,733    598,381
                                                -----------  ---------
  CASH AND CASH EQUIVALENTS, end of the period $  1,061,937 $1,138,649
                                                ===========  =========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED SEGMENTAL BREAKDOWN
FOR THE FIRST QUARTER ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
For the three months ended
March 31, 2008                Telecommunications Technology Banking
----------------------------- ------------------ ---------- ----------

Net sales to external
 customers (a)                         2,768,257    370,190   143,098
Intersegment sales                         2,288     75,628     7,999
Equity in net income of
 investees                                28,495        (1)         -
Interest income                           14,667      1,159         -
Interest expense                        (57,629)    (7,200)         -
Net interest revenue (b)                       -          -    29,515
Depreciation and amortization          (511,787)   (15,359)   (6,114)
Operating income/(loss)                  860,675      5,282    30,134
Income tax (expense)/benefit           (209,969)    (6,308)   (7,839)
Investments in affiliates                456,490      9,891         -
Segment assets                        17,651,340  2,130,682 5,793,690
Indebtedness (c)                       4,667,680    693,879   477,400
Capital expenditures                     799,793     68,111     2,123

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
For the three months ended
March 31, 2007                Telecommunications Technology Banking
----------------------------- ------------------ ---------- ----------

Net sales to external
 customers (a)                         2,064,895    282,227    75,500
Intersegment sales                         1,856     28,596     4,339
Equity in net income of
 investees                                38,312         13         -
Interest income                           10,485      5,565         -
Interest expense                        (50,850)    (8,907)         -
Net interest revenue (b)                       -          -    10,468
Depreciation and amortization          (338,235)   (13,338)   (1,174)
Operating income/(loss)                  743,132   (24,928)     9,294
Income tax expense                     (198,945)    (1,726)   (4,422)
Investments in affiliates                301,285          -         -
Segment assets                        13,688,740  1,982,743 3,439,731
Indebtedness (c)                       3,867,884    586,878   438,598
Capital expenditures                     309,420     16,281     4,246

For the three
 months ended        Mass     Real               Corporate
March 31, 2008       Media    Estate    Retail   and Other Total
------------------   -------- --------- -------- --------- ----------

Net sales to
 external
 customers (a)         38,944    81,186  147,634   231,121  3,780,430
Intersegment sales      6,204    60,445        3     5,406    157,973
Equity in net
 income of
 investees              1,483       575        -    50,731     81,283
Interest income            49     2,282       78    18,313     36,548
Interest expense      (2,070)  (12,137)  (4,126)  (43,482)  (126,644)
Net interest
 revenue (b)                -         -        -         -     29,515
Depreciation and
 amortization        (12,433)   (5,219)  (4,367)   (7,452)  (562,731)
Operating
 income/(loss)        (2,276)    24,501 (20,432)     8,178    906,062
Income tax
 (expense)/benefit    (1,282)  (13,562)    4,754  (32,230)  (266,436)
Investments in
 affiliates            21,972    52,038        -   920,926  1,461,317
Segment assets        557,810 2,160,068  539,626 4,821,811 33,655,027
Indebtedness (c)       84,380   897,164  211,304 2,128,827  9,160,634
Capital
 expenditures           4,452    53,717   10,826    41,415    980,437

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
For the three
 months ended        Mass     Real               Corporate
March 31, 2007       Media    Estate  Retail     and Other Total
------------------   -------- ------- ---------- --------- ----------

Net sales to
 external
 customers (a)         20,357  30,705     86,846   145,426  2,705,956
Intersegment sales      6,587   3,797          7     4,603     49,785
Equity in net
 income of
 investees              2,060       -          -      (60)     40,325
Interest income            46   7,157       -164    14,462     37,551
Interest expense      (1,230) (2,121)    (2,715)  (40,057)  (105,880)
Net interest
 revenue (b)                -       -          -         -     10,468
Depreciation and
 amortization         (3,712) (2,883)    (2,041)   (5,643)  (367,026)
Operating
 income/(loss)          1,317   4,109    (7,029)     7,410    733,305
Income tax expense       (37) (3,803)    (1,228)  (11,770)  (221,931)
Investments in
 affiliates             8,748   2,628          -   858,122  1,170,783
Segment assets        371,916 967,347    298,990 4,056,517 24,805,984
Indebtedness (c)       26,028 363,891    138,423 1,556,717  6,978,419
Capital
 expenditures           7,158  60,802      6,512    16,071    420,490
*T

-0-
*T

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
*T

Attachment A

Non-GAAP financial measures. This press release includes financial information
prepared in accordance with accounting principles generally accepted in the
United States of America, or US GAAP, as well as other financial measures
referred to as non-GAAP. The non-GAAP financial measures should be considered in
addition to, but not as a substitute for, the information prepared in accordance
with US GAAP.

Operating Income Before Depreciation and Amortization (OIBDA) and OIBDA margin.
OIBDA represents operating income before depreciation and amortization. OIBDA
margin is defined as OIBDA as a percentage of our net revenues. Our OIBDA may
not be similar to OIBDA measures of other companies; is not a measurement under
accounting principles generally accepted in the United States and should be
considered in addition to, but not as a substitute for, the information
contained in our consolidated statement of operations. We believe that OIBDA
provides useful information to investors because it is an indicator of the
strength and performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital expenditures,
acquisitions of mobile operators and other investments and our ability to incur
and service debt. While depreciation and amortization are considered operating
costs under generally accepted accounting principles, these expenses primarily
represent the non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods. Our OIBDA
calculation is commonly used as one of the bases for investors, analysts and
credit rating agencies to evaluate and compare the periodic and future operating
performance and value of companies within the wireless telecommunications
industry. OIBDA can be reconciled to our consolidated statements of operations
as follows:

-0-
*T
                                                     Jan -     Jan -
                                                     March     March
                                                       2008      2007
------------------------------------------------- --------- ---------

 Operating Income                                   881,299   728,479

------------------------------------------------- --------- ---------

 Depreciation and Amortization                    (562,732) (367,026)

------------------------------------------------- --------- ---------

 OIBDA                                            1,444,031 1,095,505
*T

(1) ROSNO and Perm Motors Group are accounted for as discontinued operation for
all periods presented. Thus, here and further, ROSNO's and Perm Motors Group's
financial results are excluded from all the captions presenting the Group's
consolidated results from continuing operations.

(2 )See Attachment A for definitions and reconciliation of OIBDA and OIBDA
margin and a reconciliation of OIBDA to their most directly comparable US GAAP
financial measures.

(3) Here and further, in the comparison of period to period results of
operations, in order to analyze changes, developments and trends in revenues by
reference to individual segment revenues, revenues are presented on an
aggregated basis, which is revenues after the elimination of intra-segment
(between entities in the same segment) transactions, but before inter-segment
(between entities in different segments) eliminations, unless accompanied by the
word 'consolidated'. Amounts attributable to individual companies, where
appropriate, are shown prior to both intra-segment and inter-segment
eliminations and may differ from respective standalone values due to certain
reclassifications and adjustments.

(4 )Here and further net income / (loss) for the segments are presented after
the Group's minority interests attributable to the segments.

(5) Turnover comprises the total proceeds from all service agreements, including
agency agreements.25', is to achieve Return on Invested Capital for the Sistema Group of above
25% within the 5-year period and maintain it at this level beyond. Our tools for
achieving this goal are:

    --  Continued increase in the value of all assets of the Group justified by:

        --  Delivering robust and transparent financial results

        --  Demonstrating excellent management of assets, including through
            partnerships with leading companies in respective sectors

        --  Diversifying risks and attracting capital, including through
            established partnerships with market leaders

    --  Maintaining a strict fiscal discipline based on our TSR and ROIC-driven
        philosophy, as well as transparent KPIs for all public and non-public
        companies

    --  Simplifying the Group's capital structure

    --  Demonstrating leadership in the execution of our portfolio strategy and
        management of daughter companies

    --  Becoming best in class in investor relations and corporate governance
        areas, and continuing to work with our minority shareholders in an open
        and transparent manner.

We are confident about our future and committed to increasing the shareholders'
value.'

Effective January 1, 2008, Sistema has changed its accounting policy for the
treatment of acquired businesses. Previously, the year-to-date results of the
acquired companies were consolidated in the quarter of acquisition, with the
year-to-date earnings prior to acquisition being accounted for as minority
interests in the consolidated income statement. Sistema now only consolidates
the revenues and expenses of the acquired companies from the date of
acquisition. The revised treatment improves the comparability of Sistema's
results, both with prior reporting periods and with its peer companies. All
comparative historic information in the income statement has been restated to
conform to the new accounting policy. Therefore, unaudited results for the first
and the fourth quarters of 2007 were presented as if the new policy had been
followed in 2007.

FINANCIAL SUMMARY(1)

-0-
*T
                                              Year on         Quarter
(US$ millions)                1Q 2008 1Q 2007    Year 4Q 2007      on
                                               Change          Quarter
                                                                Change
----------------------------- ------- ------- ------- ------- --------
Revenues                      3,780.4 2,706.0   39.7% 4,159.5   (9.1%)
OIBDA(2)                      1,444.0 1,095.5   31.8% 1,433.6     0.7%
Operating income                881.3   728.5   21.0%   867.0     1.7%
Income from continuing
 operations                     400.8   223.0   79.7%   472.2  (15.1%)
Basic and diluted earnings
 per share (US cent)              4.3     8.0 (46.0%)     5.1  (15.3%)
*T

Sistema's consolidated revenues increased by 39.7% year on year in the first
quarter of 2008, while declining by 9.1% quarter on quarter compared to the
fourth quarter of 2007. Sistema's results in the first quarter reflected high
levels of revenue growth in the Group's Banking, Retail, Real Estate, Tourism
and Healthcare segments combined with a strong performance in the
Telecommunications segment. Non-telecommunications segments accounted for 26.8%
of the Group consolidated revenues in the first quarter, compared to 23.7% for
the corresponding period of 2007 and 32.2% in the fourth quarter of 2007. The
organic year on year growth for the first quarter of 2008 (excluding businesses
acquired or divested since the end of the first quarter of 2007) was 35.0% and
amounted to US$ 947.1 million.

Group OIBDA increased by 31.8% year on year in the first quarter of 2008, and
rose by 0.7% quarter on quarter compared to the fourth quarter of 2007. The
Group's OIBDA margin increased from 34.5% to 38.2% quarter on quarter, as a
result of the sound momentum in MTS' operations, robust performance in the
Group's Banking segment and improved results in the Technology segment. The
Group's OIBDA margin decreased from 40.5% to 38.2% year on year in the first
quarter primarily as a result of the increase of the share of
non-telecommunications revenues in the Group's results. The rise in selling,
general and administrative expenses in the Telecommunications segment has also
contributed to the decrease in OIBDA margin. MTS demonstrated sustained growth
of 30.2% year on year in OIBDA in the first quarter in 2008 with an OIBDA margin
of 49.4% as a result of the continued increase in usage and ARPU levels in its
Russian operations. Comstar UTS' OIBDA increased by 27.1% year on year in the
first quarter with an OIBDA margin of 40.8% as a result of high consumer demand
for the MGTS unlimited tariff plan for regulated residential voice services
introduced in February 2007, as well as the revenue boost from fixed-to-mobile
calls and regions. Group OIBDA in the first quarter was, however, adversely
impacted by operating losses in the Retail and Tourism segments.

Group operating income was up 21.0% year on year in the first quarter, and by
1.7% quarter on quarter. The Group's operating margin was 23.3% in the first
quarter of 2008, compared to 20.8% in the fourth quarter of 2007 and 26.9% in
the previous period of 2007.

Depreciation and amortization expense was up 53.3% year on year to US$ 562.7
million in the first quarter, following the 48.0% growth in depreciable and
amortizable assets of the Group.

Selling, general and administrative expenses increased by 50.8% year on year to
US$ 798.6 million in the first quarter as a result of the corresponding growth
of the business and the impact of rising inflation. Selling, general and
administrative expenses decreased by 13.9% quarter on quarter, compared to the
fourth quarter of 2007.

The effective tax rate was 25.7% for the first quarter of 2008, compared to
32.0% in the first quarter of 2007 and 21.3% in the fourth quarter of 2007.

The income from continuing operations nearly doubled year on year in the first
quarter as a result of the Group's strong operating performance while declining
15.1% quarter on quarter impacted by the revaluation effect from Comstar UTS'
call and put option agreement in the fourth quarter of 2007.

The net income decreased by 47.5% year on year to US$ 398.7 million due to the
impact of US$ 521.9 million gain on the sale of the Group's stake in ROSNO in
the first quarter of 2007.

The Group reported a 46.0% year on year decrease in basic and diluted earnings
per share from US cent 8.0 to US cent 4.3 for the first quarter of 2008.

OPERATING REVIEW(3)

TELECOMMUNICATIONS

-0-
*T
                                              Year on         Quarter
(US$ millions)                1Q 2008 1Q 2007   Year  4Q 2007      on
                                               Change          Quarter
                                                                Change
------------------------------------- ------- ------- ------- --------
Revenues                      2,770.5 2,066.8   34.1% 2,693.1     2.9%
OIBDA                         1,372.5 1,081.4   26.9% 1,261.5     8.8%
Operating Income                860.7   743.1   15.8%   738.9    16.5%
Net Income(4)                   364.6   227.3   60.4%   266.9    36.6%
*T

The Telecommunications segment, which comprises MTS, the largest mobile phone
operator in Russia and the CIS, and Comstar UTS, the leading fixed line
telecommunications operator in Russia and the CIS, achieved 34.1% year on year
revenue growth in the first quarter of 2008 and 2.9% quarter on quarter
increase. The segment accounted for 73.2% of the Group's consolidated revenues
in the first quarter of 2008 and included for the first time the financial
results of Shyam Telelink, a fixed and mobile services provider in India. MTS
continued to be the main contributor to the segment revenues and accounted for
85.4 % of the segment's revenue in the first quarter.

MTS added around 3 million subscribers during the first quarter of 2008
resulting in the total consolidated base of approximately 84.9 million customers
as at March 31, 2008. MTS generated 36.6% year on year revenue growth for the
first quarter from US$ 1,741.3 million to US$ 2,379.2 million. This growth
reflected an increase in average monthly service revenue per subscriber ('ARPU')
in Russia from US$ 8.2 in the first quarter of 2007 to US$ 10.0 in the first
quarter of 2008. Russian subscribers' monthly Minutes of Use (MOU) increased to
193 in the first quarter of 2008 from 134 in the first quarter of 2007. In the
first quarter of 2008 MTS' revenues increased by 2.3% quarter on quarter to US$
2,379.2 million from US$ 2,326.4 million.

MTS' OIBDA, as a result of the robust ARPU development combined with the organic
growth of its subscriber base, rose by 30.2% year on year and 4.3% quarter on
quarter to US$ 1,175.5 million in the first quarter. The OIBDA margin in the
first quarter was 49.4% compared to 51.9% a year ago as a result of the rising
interconnect costs and costs of accommodating new subscribers in its Russian
customer base. The OIBDA margin was 48.4% in the fourth quarter of 2007.

Comstar UTS generated 26.8% year on year revenue growth in the first quarter,
from US$ 328.9 million to US$ 417.0 million. This growth reflected continued
high consumer demand for MGTS's unlimited tariff plan for regulated residential
voice services, as well as the continuing revenue boost from fixed-to-mobile
calls and increasing contribution from the regions. The results include for the
first time contributions from Digital Telephone Networks South (DTN) and
Regional Technical Centre (RTC), which were acquired in the fourth quarter of
2007. Comstar' revenues increased by 3.8% quarter on quarter to US$ 417.0
million from US$ 401.6 million. Comstar UTS' Moscow broadband subscriber base
grew by 83% year on year in the first quarter to 799,000 customers, including
750,000 residential subscribers. This growth was driven primarily by the
continuing success of the 'Broadband in Every Home' campaign launched in
November 2007 and the active engagement of retail chains at the point of sale.
The number of triple play subscribers in Moscow increased by 30% year on year to
134,000 households.

Comstar UTS' OIBDA increased by 27.1% year on year and 20.4% quarter on quarter
to US$ 170.2 million in the first quarter with an OIBDA margin of 40.8% compared
to 40.3% a year ago and 40.7% for the fourth quarter of 2007.

Shyam Telelink Ltd. ('Shyam Telelink') contributed US$ 7.5 million to the
segment's revenues following the consolidation of Shyam Telelink results
starting from January 2008.

Segment OIBDA was up 26.9% year on year in the first quarter of 2008 and up 8.8%
quarter on quarter compared to the fourth quarter of 2007.

Segment's net income increased by 60.4% year on year in the first quarter of
2008 and by 36.6% quarter on quarter compared to the fourth quarter of 2007.

In February 2008, MTS consolidated the remaining 9.0% stake in its Omsk
subsidiary for US$ 16 million. The subsidiary provides GSM 900/1800 services
under the MTS brand and is one of the leading wireless service providers in the
Omsk region with a population of 2.1 million.

In March 2008, the Board of Directors of Comstar UTS approved the introduction
of a long-term incentive program for the Company's management team. The program
is set to run from April 1, 2008 with a two year vesting period. The eligible
program participants are determined by the Board of Directors every two years
starting from the launch of the program. A total of 151 managers are expected to
participate in the scheme during 2008-2010.

TECHNOLOGY

-0-
*T
                                               Year on        Quarter
(US$ millions)                      1Q     1Q    Year     4Q       on
                                   2008   2007  Change   2007  Quarter
                                                                Change
--------------------------------- ----- ------ ------- ------ --------
Revenues                          445.8  310.8   43.4%  603.9  (25.8%)
OIBDA                              20.6 (11.6)  278.1%    5.3   292.7%
Operating Income / (Loss)           5.3 (24.9)       - (10.7)        -
Net Loss                          (5.8) (23.0)       - (35.5)        -
*T

The Technology segment comprises SITRONICS, a leading provider of
telecommunications, IT and microelectronic solutions in Russia and the CIS, with
a growing presence in other EEMEA emerging markets. SITRONICS' revenues were up
43.4% year on year in the first quarter of 2008. The Information Technology
Solutions and Microelectronic Solutions divisions continued to demonstrate a
strong growth during the first quarter.

The segment produced OIBDA of US$ 20.6 million in the first quarter of 2008,
compared to OIBDA of US$ 5.3 million in the fourth quarter of 2007 and negative
OIBDA of US$ 11.6 million in the first quarter of 2007. The OIBDA margin
amounted to 4.6% in the first quarter compared to 0.9% in the fourth quarter of
2007.

In March 2008, SITRONICS acquired a 36% stake in Kvazar-Micro from Melrose
Holding Company for US$ 116.9 million. As a result of the transaction,
SITRONICS' share increased to 87% of Kvazar-Micro.

REAL ESTATE

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
----------------------------------- ----- ----- ------- ----- --------
Revenues                            141.6  34.5  310.5% 244.7  (42.1%)
OIBDA                                29.7   7.0  325.1% 120.9  (75.4%)
Operating Income                     24.5   4.1  496.3% 114.8  (78.7%)
Net Income                           21.0   4.7  347.1%  86.1 (170.7%)
*T

Revenues in Sistema Hals, a leading Moscow-based real estate development,
management and investment company, nearly quadrupled year on year in the first
quarter, primarily as a result of the strong growth in the real estate
development division. The division generated the majority of its revenue growth
from the sale of the 'Rochdelskaya 22' project, a building complex at '8 Marta
Street', as well as ongoing sales of 'Dnepropetrovskaya', 'Nahimovskiy',
'Michurinskiy' and 'Rublevskoe highway' residential developments. Segment
revenues declined 42.1% quarter on quarter.

Segment OIBDA more than quadrupled year on year in the first quarter to US$ 29.7
million with the OIBDA margin of 21.0% compared to 20.2% in the previous year.
OIBDA declined 75.4% quarter on quarter.

BANKING

-0-
*T
                                                  Year        Quarter
(US$ millions)                         1Q    1Q     on    4Q       on
                                      2008  2007   Year  2007  Quarter
                                                 Change         Change
------------------------------------ ----- ----- ------ ----- --------
Revenues                             151.1  79.8  89.3% 139.5     8.3%
OIBDA                                 36.2  10.5 246.3%  17.7   105.0%
Operating Income                      30.1   9.3 224.2%  14.2   112.8%
Net Income                            20.3   4.4 365.3%   7.5    93.6%
*T

The Banking segment comprises the Moscow Bank for Reconstruction and Development
(MBRD), the East-West United Bank (EWUB) and Dalcombank, which was consolidated
in the segment's operations in the end of 2007. The segment provides corporate
and retail banking services in Russia and Luxembourg. The segment revenues
nearly doubled year on year in the first quarter of 2008 and increased by 8.3%
quarter on quarter, as a result of the strong organic growth of the segment's
retail and corporate lending portfolios, as well as the above mentioned
acquisition of Dalcombank. The loan portfolio grew by 140.7% to US$ 3.6 billion
as at March 31, 2008, with Dalcombank contributing 27.7% of the overall growth,
compared to US$ 1.5 billion as at March 31, 2007. Interest income received from
retail and corporate lending more than doubled year on year, with Dalcombank
accounting for 29.1% of the growth, and was up 22.3% quarter on quarter to US$
128.8 million in the first quarter. Revenues from leasing activities doubled
year on year and were up 18.2% quarter on quarter to US$ 13 million in the first
quarter of 2008.

Segment OIBDA more than tripled year on year and increased 105.0% quarter on
quarter following the consolidation of Dalcombank in the end of 2007 and the
reversal of a part of the previously created obligatory reserves in the first
quarter of 2008 resulting from the change in the norms of deposition of
obligatory reserves.

The segment's retail business included 161 points of sales, including 69 points
of sales in Moscow and 92 points in 34 Russian regions as at March 31, 2008.
MBRD is pursuing a dynamic regional expansion strategy to offer retail lending
services through the opening of small format offices with minimal capital
expenditure.

RETAIL

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
---------------------------------- ------ ----- ------- ----- --------
Revenues                            147.6  86.9   70.0% 263.5  (44.0%)
OIBDA                              (16.1) (5.0)       -  45.1        -
Operating (Loss)/ Income           (20.4) (7.0)       -  40.7        -
Net (Loss)/ Income                 (18.4) (9.1)       -  29.6        -
*T

The Retail segment comprises Detsky Mir, the largest children's goods chain of
retail stores in Russia. Total revenues increased by 70% year on year and
decreased by 44% quarter on quarter, whilst retail revenues accounted for 91% of
total revenues for the first quarter and amounted to US$ 133.8 million.

Detsky Mir reported a net loss in the first quarter, which was largely due to
the significant expansion of the retail store network undertaken in the fourth
quarter of 2007 and the first quarter of 2008, and the fact that the first
quarter is a seasonally weaker period of the year.

The network of retail outlets grew by 30 stores to 97 in total as of March 31,
2008, while the aggregate retail space increased by 51% year on year to 177
thousand square metres.

As at June 26, 2008, Detsky Mir's retail network consisted of 103 retail outlets
located in 51 cities of Russia and the CIS, with total retail space of 186
thousand square metres.

In June 2008, Detsky Mir launched its first store in Ukraine as part of its CIS
expansion strategy.

MASS MEDIA

-0-
*T
                                                Year on       Quarter
(US$ millions)                        1Q    1Q    Year    4Q       on
                                     2008  2007  Change  2007  Quarter
                                                                Change
----------------------------------- ----- ----- ------- ----- --------
Revenues                             45.1  26.9   67.6%  41.6     8.6%
OIBDA                                10.2   5.0  102.0%  10.9   (6.6%)
Operating (Loss) / Income           (2.3)   1.3       -   0.5        -
Net (Loss) / Income                 (1.3) (0.2)       -   1.8        -
*T

The Mass Media segment, which comprises the Group's Pay-TV business, operating
under the brand name Stream-TV, as well as advertising, print and other media
operations, generated 67.6% year on year revenue growth in the first quarter of
2008, primarily as a result of the increase in Stream-TV and Internet ARPU and
robust subscriber growth. Segment revenues increased 8.6% quarter on quarter.
Stream-TV's revenues increased nearly 47.9% year on year to US$ 28.4 million in
the first quarter. Stream-TV subscriber base was up by 11.8% year on year to 1.8
million subscribers, while its Internet subscriber base has nearly doubled to
144 thousand subscribers and IP-telephony users increased to 10,200 during the
period. Combined Stream-TV ARPU increased from US$ 2.9 in the first quarter of
2007 to US$ 3.8, while Pay-TV ARPU increased from US$ 4 to US$ 4.9 during the
same period. Internet ARPU increased from US$ 13.5 in the first quarter of 2007
to US$ 16.3 in the first quarter of 2008.

CORPORATE AND OTHER

-0-
*T
(US$ millions)                                Year on         Quarter
                                    1Q    1Q     Year     4Q       on
                                   2008  2007   Change   2007  Quarter
                                                                Change
--------------------------------- ----- ----- -------- ------ --------
Revenues
 Radars and Aerospace              90.2  70.3    28.2%  167.8  (46.3%)
 Tourism                           72.7  48.6    49.7%   99.1  (26.6%)
 Pharmaceuticals                   14.1  17.2  (17.8%)   13.3     6.2%
 Healthcare Services               26.8   5.4   400.0%   22.8    17.7%
 Other                             32.7   8.5   260.0%   74.4  (56.0%)
--------------------------------- ----- ----- -------- ------ --------
Total                             236.5 150.0    57.7%  374.7  (14.9%)
OIBDA
 Radars and Aerospace              14.2  12.4    14.9%   16.2  (12.1%)
 Tourism                            1.8   6.4  (71.5%)    5.2  (64.8%)
 Pharmaceuticals                  (1.8)   3.5 (151.9%)  (2.0)  (11.0%)
 Healthcare Services                2.7   0.4   587.7%    2.9   (4.8%)
 Other                            (1.3) (9.6)        - (66.8)        -
--------------------------------- ----- ----- -------- ------ --------
Total                              15.6  13.0   232.3% (44.5)        -
*T

The Radars and Aerospace segment's revenues increased by 28.2% year on year in
the first quarter, as a result of an increase in the volume of services
performed under a number of government contracts. Revenues declined 46.3%
quarter on quarter while OIBDA decreased 12.1% quarter on quarter following the
completion of B2G contracts in the fourth quarter of 2007. RTI Systems' OIBDA
was up by 14.9% year on year in the first quarter with OIBDA margin of 15.8%
driven by robust operating results.

In March 2008, RTI Systems completed the sale of 100.0% in CJSC Sahles to CJSC
Saturn, a subsidiary of OPK Oboronprom, for a total cash consideration of US$
190 million. CJSC Sahles owned a 71.63% stake in OJSC Perm Motors Plant, as well
as controlling stakes in other entities which constitute the Perm Motors Group
('PMG').

The Tourism segment's revenues increased by 49.7% year on year in the first
quarter of 2008, primarily as a result of the strong performance of its tour
operating division. Revenues declined 26.6% quarter on quarter following
seasonally strong fourth quarter. The segment's sales turnover(5) more than
doubled year on year in the first quarter to US$ 119.7 million, following the
rapid development of the tour operating division very, particularly on routes to
Turkey and Egypt. The tour operating division accounted for 67% of segment
revenues in the first quarter of 2008 compared to 62% for the corresponding
period in 2007 and 76.1% in the fourth quarter of 2007. Segment OIBDA decreased
year on year and quarter on quarter following the dynamic growth of retail
network and expansion in the highly competitive outbound travel market. The
segment serviced 185 thousand customers in the first quarter of 2008 compared to
100 thousand for the corresponding period of 2007. The hotel group, which
comprises 9 hotels, increased the total number of rooms by 17.1% to nearly 2,455
rooms as of March 31, 2008.

The Pharmaceuticals segment's revenues declined 17.8% year on year as a result
of factory's reconstruction, however, revenues increased 6.2% quarter on
quarter. Segment OIBDA decreased year on year due to a one-off gain from the
sale of a building in the first quarter of 2007.

The Healthcare Services segment's revenues increased nearly fivefold year on
year and by 17.7% quarter on quarter following strong operational results and
acquisition of Family Healthcare Corporation in December 2007. The segment,
which comprises the Medsi and Medsi-II clinics, American Hospital Group,
Medexpress and Family Healthcare Corporation, is developing into a leading
private healthcare provider in Russia, with comprehensive medical care and a
chain of private clinics. In February 2008, Sistema completed the integration of
its Healthcare Services division's assets into the 'Medsi Group' Holding, 100%
owned by Sistema. Sistema transferred to Medsi Group a 20.0% stake in
MedExpress, which comprises 26 clinics in Moscow and the regions and an
ambulance service; 100% of American Hospital Group, a family clinic which
operates under the 'American Medical Centers' brand; and 53.3% stake in Medsi
clinic, an out-patient clinic for adults. Segment OIBDA increased nearly seven
times year on year in the first quarter of 2008 as a result of the growth in its
operations.

FINANCIAL REVIEW

Net cash provided by operating activities increased by 303.7% year on year to
US$ 863.3 million in the first quarter mainly due to the increase in the Group's
working capital.

Net cash used in investing activities totalled US$ 1,645.5 million in the first
quarter of 2008, while US$ 980.4 million of capital expenditure included US$
406.6 million for the purchase of licences by Shyam Telelink, compared to US$
378.0 million and US$ 420.5 million, respectively, for the corresponding period
of 2007. The Group spent US$ 703.3 million on the acquisition of businesses in
the first quarter, including US$ 423.1 million on purchase of an additional
0.55% stake in MTS, compared to US$ 39.0 million in the previous year.

Cash flows from financing activities amounted to US$ 732.4 million in the first
quarter of 2008, compared to US$ 703.4 million for the corresponding period of
2007. Major changes in the sources of financing in the first quarter included
RUB 6 billion (approximately US$ 251.6 million) corporate bond offering by
Sistema, US$ 495 million loans received by Shyam Telelink from ICICI Bank and
ABN AMRO Bank N.V., US$ 75 million loan received by SITRONICS from Dresdner Bank
AG.

In February 2008, MBRD securitised part of its car loan portfolio. This deal
provided the Bank with funding in the amount of RUB 1.5 billion (approximately
US$ 64 million). MBRD may increase the borrowing up to US$ 200 million in the
next 12 months.

The Group's cash balances stood at US$ 1,061.9 million as at March 31, 2008,
compared to a balance of US$ 1,061.7 million as at March 31, 2007. The Group's
net debt (short-term and long-term debt minus cash and cash equivalents)
increased to US$ 8,099.0 million as at March 31, 2008 compared to US$ 5,842.2
million as at March 31, 2007.

SIGNIFICANT EVENTS FOLLOWING THE END OF THE REPORTING PERIOD

Telecommunications

In June 2008, Comstar completed the acquisition of 100% of the share capital of
Interlink Group for a total cash consideration of RUB 200 million (approximately
US$ 8.5 million). The Group comprises Intersvyaz Service, the alternative
fixed-line telecommunications operator, and Inter-TV Media, the cable TV
operator, which operate under the unified brand 'Interlink' in Ryazan and the
Ryazan region.

In June 2008, Comstar commenced the merger of Comstar-Direct, a leading provider
of broadband internet access services in Moscow. Comstar currently owns 51.8% of
Comstar-Direct, with the remaining 48.2% owned by Sistema Mass Media.

In June 2008, Sistema increased its stake in Shyam Telelink from 72% to 73.71%
as a result of its participation in the charter capital increase of Shyam
Telelink in the total amount of US$ 470 million with Sistema's contribution
being US$ 348 million. During the same month, Sistema received radio frequencies
under CDMA 800 MHz in four additional Indian circles. Altogether Shyam Telelink
now has spectrum in 19 telecommunications circles, covering 27 Indian states
with a population of 1,066.5 million people (which comprise around 94.5% of the
Indian population).

In May 2008, Sistema signed an amendment to the call option agreement, which
gave it the right to accelerate the purchase of an additional 21% stake in Shyam
Telelink. In accordance with this amendment, Sistema has exercised a call option
and acquired the additional 21% stake in Shyam Telelink, increasing its stake
from 51% to 72%.

In May 2008, MTS' Board of Directors approved amendments to the employee
motivation and retention program that was adopted in June 2007 with reward
periods extending through 2011. As amended, the program will involve a total of
10,207,751 phantom and actual American Depositary Receipts (ADRs). The amended
program increases the share of individual employee's compensation dependent upon
the level of investment appeal of the Company as judged by growth in share price
combined with dividend payout, or total shareholder return (TSR), as well as the
realization of key strategic goals. Program participants become eligible for
their awards upon reaching an annual TSR level of not less than 15%. Prior to
its amendment, the program included 3.6 million phantom ADRs as well as
performance-based monetary awards that were independent of the stock price.

In May 2008, MTS' Board of Directors appointed Mr. Mikhail Shamolin as the
President and CEO of MTS. Mr. Shamolin has previously served as the Head of MTS
Russia.

In May 2008, Comstar signed a strategic agreement with FON Wireless Ltd.
('FON'), a developer of a shared wireless internet access network based on Wi-Fi
technology. Under the terms of the agreement, Comstar and FON will develop a
Wi-Fi internet access network. It will be created on the basis of the Comstar
subscriber base in Moscow and will, therefore, enable the local customers to
join the worldwide FON network. Within the framework of the project, Comstar
plans to establish 30,000 Wi-Fi access points in Moscow in 2008-2009.

In April 2008, Fitch Ratings assigned MTS a Long-term Issuer Default rating
(IDR) of 'BB+', National Long-term rating of 'AA(rus)' and Short-term IDR of 'B'
with a stable outlook.

Real Estate

In May 2008, Fitch Ratings confirmed a B+ credit rating for Sistema-Hals with a
negative outlook.

Corporate and Others

In June 2008, Sistema signed US$ 613.3 million syndicated multi-tranche loan
facility with ABN AMRO.

In May 2008, Sistema signed an agreement on cooperation with CPMIEC, the Chinese
National Precision Machinery Import & Export Corporation. The agreement aims to
develop cooperation on the Russian and Chinese markets, and also in third
countries in the sphere of high-technology and developers' services.

In May 2008, Sistema signed a Memorandum of Understanding with DAS Holding LLC,
an international investment holding company with headquarters in Abu Dhabi. The
main goal of the Memorandum is to develop the cooperation in various sectors of
the economy, such as investments into real estate and construction projects,
banking, medicine, tourism and the hotel business in Russia, the CIS and United
Arab Emirates.

In May 2008, Sistema's Board of Directors appointment Leonid Melamed as
President and Chief Executive Officer of Sistema with immediate effect. Mr
Melamed, the former CEO and President of Mobile TeleSystems ('MTS'), replaced
Alexander Goncharuk, who will continue to serve as First Deputy Chairman of
Sistema's Board of Directors. Mr Goncharuk has been a member of the Board of
Directors of Sistema since 1996.

In April 2008, Sistema repaid its US$ 350 million Eurobond issue. The Eurobond
issue was repaid upon its maturity in full using the Company's cash flows and
previously obtained debt financing.

In April 2008, Sistema Board of Directors recommended an annual dividend of RUB
2,512.5 million, (approximately US$ 106.4 million), for the year ended December
31, 2007 to holders of Sistema shares. The dividend, which amounts to a payment
of RUB 0.25 per share (approximately US$ 0.21 per Global Depositary Receipt), is
more than five times higher than the dividend paid for the same period of 2006.

Conference call information

Sistema management will host a conference call today at 9 am (New York time) / 2
pm (London time) / 3 pm (CET) / 5 pm (Moscow Time) to present and discuss the
fourth quarter results.

The dial-in numbers for the conference call are:
UK/International: +44 20 7190 1232
US: +1 480 629 1990

A replay will then be available for 7 days after the conference
call. To access the replay, please dial:
UK/International: +44 20 7154 2833
US: +1 303 590 3030

PIN number: 3889255#

                                       ***

-0-
*T
For further information, please visit www.sistema.com or contact:

Sistema Investor Relations                             Shared Value Limited
Laila Simanova                                         Larisa Kogut-Millings
Tel: +7 495 730 66 00                                  Tel: +44 (0) 20 7321 5037
ir@sistema.ru                                          sistema@sharedvalue.net

Head of International Press Office
Kirill Semenov
Tel: +7 495 730 71 88
ksemenov@sistema.ru
*T

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 100 million customers. Sistema develops and manages market-leading
businesses in selected service-based industries, including telecommunications,
technology, banking, real estate, retail, media, tourism and healthcare. Founded
in 1993, the company reported unaudited revenues of US$ 3.8 billion for the
first quarter of 2008, and total assets of US$ 30.3 billion as at March 31,
2008. Sistema's shares are listed under the symbol 'SSA' on the London Stock
Exchange, under the symbol 'AFKS' on the Russian Trading System (RTS), under the
symbol 'AFKC' on the Moscow Interbank Currency Exchange (MICEX), 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. In addition, there is
no assurance that the new contracts entered into by our subsidiaries referenced
above will be completed on the terms contained therein or at all. 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.

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                          Jan - March    Jan - March
                                          2008           2007
                                          -------------  -------------

Sales                                    $    3,637,332 $    2,630,463
Revenues from financial services                143,098         75,493

                                          -------------  -------------
TOTAL REVENUES                                3,780,430      2,705,956
                                          -------------  -------------

Cost of sales, exclusive of depreciation
 and amortization shown separately below    (1,493,670)    (1,043,296)
Financial services related costs,
 exclusive of depreciation and
 amortization shown separately below           (55,127)       (31,329)

                                          -------------  -------------
TOTAL COST OF SALES                         (1,548,797)    (1,074,625)
                                          -------------  -------------

Selling, general and administrative
 expenses                                     (798,649)      (529,475)
Depreciation and amortization                 (562,732)      (367,026)
Provision for doubtful accounts                (30,294)       (22,321)
Other operating expenses, net                  (11,289)       (23,757)
Equity in net income of investees                21,673         36,511
Gain on disposal of interests in
 subsidiaries and affiliates                     30,957          3,216

                                          -------------  -------------
OPERATING INCOME                                881,299        728,479
                                          -------------  -------------

Interest income                                  21,370         20,752
Change in fair value of derivative
 instruments                                     14,369         13,500
Interest expense, net of amounts
 capitalized                                  (119,039)       (99,963)
Currency exchange and translation gain          196,785         31,821

                                          -------------  -------------
Income from continuing operations before
 income tax, equity in net income of
 energy companies in the Republic of
 Bashkortostan and minority interests           994,784        694,589
                                          -------------  -------------

Income tax expense                            (266,435)      (221,931)
Minority interests                       $    (369,916) $    (263,656)
Equity in net income of energy companies
 in the Republic of Bashkortostan, net of
 minority interest of $8,348 and $7,532,
 respectively                                    42,383         13,989

Income from continuing operations               400,816        222,991

(Loss)/Income from discontinued
 operations, net of income tax
 benefit/(expense) of $5,391 and
 ($2,207), respectively                         (4,194)            960

Gain from disposal of discontinued
 operations, net of income tax effect of
 $280 and $148,809                                2,053        521,963

NET INCOME                               $      398,675 $      745,914

Weighted average number of common shares
 outstanding                              9,278,010,358  9,365,757,000

Earnings per share, basic and diluted, US
 cent
Income from continuing operations                   4.3            2.4
Income from discontinued operations                   -            5.6
Net income                                          4.3            8.0
*T


UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND 2007
(Amounts in
thousands of U.S. dollars)

-0-
*T
                                                March 31,   December
                                                2008         31,
                                                            2007
                                                ----------  ----------

ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                    $ 1,061,937 $ 1,061,733
  Short-term investments                           984,016     909,224
  Loans to customers and banks, net              2,961,328   2,764,763
  Accounts receivable, net                       1,571,397   1,383,731
  Prepaid expenses, other receivables and
  other current assets, net                        994,880     950,104
  VAT receivable                                   383,121     435,245
  Inventories and spare parts                      885,221     780,193
  Deferred tax assets, current portion             290,767     213,633
  Assets of discontinued operations                      -     545,863

                                                ----------  ----------
     Total current assets                        9,132,667   9,044,489
                                                ----------  ----------

NON-CURRENT ASSETS:
  Property, plant and equipment, net            11,323,907  10,412,636
  Advance payments for non-current assets          313,045     284,396
  Goodwill                                       1,187,502     860,019
  Licenses, net                                  1,129,888     730,636
  Other intangible assets, net                   1,786,405   1,665,969
  Investments in affiliates                      1,432,438   1,352,972
  Investments in shares of Svyazinvest           1,550,499   1,485,378
  Loans to customers and banks, net of current
   portion                                       1,345,779   1,468,088
  Debt issuance costs, net                          98,893     101,904
  Deferred tax assets, net of current portion      139,832     108,637
  Other non-current assets                         813,739     881,534

                                                ----------  ----------
     Total non-current assets                   21,121,927  19,352,169
                                                            ----------

                                                ----------  ----------
TOTAL ASSETS                                   $30,254,594 $28,396,658
                                                ==========  ==========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                March 31,   December
                                                2008         31,
                                                            2007
                                                ----------  ----------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                             $ 1,443,215 $ 1,273,487
  Bank deposits and notes issued, current
   portion                                       2,477,948   2,101,084
  Taxes payable                                    380,535     223,791
  Deferred tax liabilities, current portion         91,761      77,893
  Subscriber prepayments, current portion          559,883     598,014
  Derivative financial instruments                  77,000     140,563
  Accrued expenses and other current
   liabilities                                   1,496,730   1,357,277
  Short-term loans payable                       1,104,401     724,905
  Current portion of long-term debt              1,174,245   1,517,902
  Liabilities of the discontinued operations             -     396,132

                                                ----------  ----------
     Total current liabilities                   8,805,718   8,411,048
                                                ----------  ----------

LONG-TERM LIABILITIES:
  Long-term debt, net of current portion         6,881,988   6,241,937
  Subscriber prepayments, net of current
   portion                                         138,365     134,280
  Bank deposits and notes issued, net of
   current portion                               1,035,770   1,266,925
  Deferred tax liabilities, net of current
   portion                                         473,841     428,030
  Postretirement benefits obligation                44,989      42,370
  Deferred revenue                                 145,298     139,984

                                                ----------  ----------
     Total long-term liabilities                 8,720,251   8,253,526
                                                ----------  ----------

                                                ----------  ----------
TOTAL LIABILITIES                               17,525,969  16,664,574
                                                ----------  ----------

Minority interests in equity of subsidiaries     5,324,464   4,987,220

Commitments and contingencies                            -           -

Puttable shares of SITRONICS                        87,625      86,100

SHAREHOLDERS' EQUITY:
  Share capital (9,278,328,668 and
   9,276,092,868 shares issued and outstanding
   as of March 31, 2008 and December 31, 2007,
   respectively, with par value of 0.09 Russian
   Rubles)                                          30,057      30,057
  Treasury stock (371,671,332 and 373,907,132
   shares as of March 31, 2008 and December 31,
   2007, respectively, with par value of 0.09
   Russian Rubles)                               (466,345)   (469,365)
  Additional paid-in capital                     2,439,069   2,439,069
  Retained earnings                              4,433,830   4,035,157
  Accumulated other comprehensive income           879,925     623,846

                                                ----------  ----------
TOTAL SHAREHOLDERS' EQUITY                       7,316,536   6,658,764

                                                ----------  ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY     $30,254,594 $28,396,658
                                                ==========  ==========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                       2008       2007
                                                  ---------  ---------
  CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                       $  398,763 $  745,914

  Adjustments to reconcile net income to net cash
   provided by operations:
    Depreciation and amortization                   562,732    367,026
    Gain from disposal of discontinued operations   (2,141)  (521,963)
    Loss/(gain) from discontinued operations          4,194      (960)
    Gain on disposal of long-term investments      (30,091)          -
    Minority interests                              378,264    271,188
    Equity in net income of investees              (72,404)   (58,032)
    Deferred income tax benefit                    (76,867)   (11,998)
    Change in fair value of derivative financial
     instruments                                   (14,369)   (13,500)
    Foreign currency transactions gain on non-
     operating activities                         (196,785)   (31,821)
    Debt issuance cost amortization                   6,031      8,615
    Non-cash compensation to employees of
     subsidiaries                                    10,839      1,664
    Gain on disposal of interests in subsidiaries
     and affiliates                                (30,957)    (3,216)
    Gain on disposal of property, plant and
     equipment                                     (12,401)    (1,257)
    Amortization of connection fees                (15,415)   (23,533)
    Provision for doubtful accounts receivable       30,294     28,745
    (Recovery of allowance)/allowance for loan
     losses                                        (18,774)        995
    Inventory obsolescence expense                      989          -

  Changes in operating assets and liabilities,
  net of effects from purchase of businesses:
    Trading securities                             (13,169)  (236,462)
    Loans to banks issued by the Banking segment    227,986  (219,665)
    Accounts receivable                           (181,124)     74,824
    VAT receivable                                   52,124     41,982
    Other receivables and prepaid expenses         (44,512)  (127,050)
    Inventories                                   (106,012)   (50,109)
    Accounts payable                              (176,658)     35,195
    Subscriber prepayments                         (18,631)   (61,363)
    Taxes payable                                   156,423  (115,989)
    Accrued expenses, subscriber prepayments and
     other liabilities                               42,303    116,429
    Postretirement benefit obligation                 2,619       (39)
                                                  ---------  ---------
    NET CASH PROVIDED BY OPERATING ACTIVITIES       863,251    215,620
                                                  ---------  ---------
*T

JSFC SISTEMA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
FOR THE THREE MONTHS ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
                                                       2008       2007
                                                -----------  ---------
  CASH FLOWS FROM INVESTING ACTIVITIES:
    Payments for purchases of property, plant
     and equipment                                (631,416)  (332,657)
    Payments for purchases of intangible assets   (349,020)   (71,360)
    Payments for purchases of businesses, net
     of cash acquired                             (703,336)   (39,000)
    Proceeds from sale of subsidiaries, net of
     cash disposed                                  260,412    636,683
    Payments for purchases of long-term
     investments                                    (6,829)    (5,479)
    Payments for purchases of short-term
     investments                                  (139,536)  (212,306)
    Payments for purchases of other non-current
     assets                                        (74,931)  (105,551)
    Proceeds from sale of other non-current
     assets                                         119,697          -
    Proceeds from sale of property, plant and
     equipment                                       53,893      1,357
    Proceeds from sale of long-term investments      30,091     20,000
    Proceeds from sale of short-term
     investments                                     78,923     10,973
    Net increase in loans to customers of the
     Banking segment                              (283,468)  (280,629)
                                                -----------  ---------
  NET CASH USED IN INVESTING ACTIVITIES         (1,645,520)  (377,969)
                                                -----------  ---------

  CASH FLOWS FROM FINANCING ACTIVITIES:
    (Principal payments on)/proceeds from
     short-term borrowings, net                     310,789    208,800
    Net (decrease)/increase in deposits from
     customers of the Banking segment             (121,731)     70,954
    Net increase in promissory notes issued by
     the Banking segment                            267,439    157,028
    Proceeds from long-term borrowings, net of
     debt issuance costs                            999,036     75,690
    Debt issuance costs                             (3,020)      (525)
    Principal payments on long-term borrowings    (722,263)  (159,112)
    Principal payments on capital lease
     obligations                                      (852)    (7,713)
    Proceeds from capital transactions of
     subsidiaries                                         -    356,463
    Proceeds from sale of treasury shares             3,020          -
                                                -----------  ---------
  NET CASH PROVIDED BY FINANCING ACTIVITIES    $    732,418 $  701,585
                                                -----------  ---------

  Effects of foreign currency translation on
   cash and cash equivalents                   $     50,055 $    1,033

  INCREASE IN CASH AND CASH EQUIVALENTS        $        204 $  540,269

  CASH AND CASH EQUIVALENTS, beginning of the
   period                                         1,061,733    598,381
                                                -----------  ---------
  CASH AND CASH EQUIVALENTS, end of the period $  1,061,937 $1,138,649
                                                ===========  =========
*T

SISTEMA JSFC AND SUBSIDIARIES
UNAUDITED SEGMENTAL BREAKDOWN
FOR THE FIRST QUARTER ENDED MARCH 31, 2008 AND 2007
(Amounts in thousands of U.S. dollars)

-0-
*T
For the three months ended
March 31, 2008                Telecommunications Technology Banking
----------------------------- ------------------ ---------- ----------

Net sales to external
 customers (a)                         2,768,257    370,190   143,098
Intersegment sales                         2,288     75,628     7,999
Equity in net income of
 investees                                28,495        (1)         -
Interest income                           14,667      1,159         -
Interest expense                        (57,629)    (7,200)         -
Net interest revenue (b)                       -          -    29,515
Depreciation and amortization          (511,787)   (15,359)   (6,114)
Operating income/(loss)                  860,675      5,282    30,134
Income tax (expense)/benefit           (209,969)    (6,308)   (7,839)
Investments in affiliates                456,490      9,891         -
Segment assets                        17,651,340  2,130,682 5,793,690
Indebtedness (c)                       4,667,680    693,879   477,400
Capital expenditures                     799,793     68,111     2,123

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
For the three months ended
March 31, 2007                Telecommunications Technology Banking
----------------------------- ------------------ ---------- ----------

Net sales to external
 customers (a)                         2,064,895    282,227    75,500
Intersegment sales                         1,856     28,596     4,339
Equity in net income of
 investees                                38,312         13         -
Interest income                           10,485      5,565         -
Interest expense                        (50,850)    (8,907)         -
Net interest revenue (b)                       -          -    10,468
Depreciation and amortization          (338,235)   (13,338)   (1,174)
Operating income/(loss)                  743,132   (24,928)     9,294
Income tax expense                     (198,945)    (1,726)   (4,422)
Investments in affiliates                301,285          -         -
Segment assets                        13,688,740  1,982,743 3,439,731
Indebtedness (c)                       3,867,884    586,878   438,598
Capital expenditures                     309,420     16,281     4,246

For the three
 months ended        Mass     Real               Corporate
March 31, 2008       Media    Estate    Retail   and Other Total
------------------   -------- --------- -------- --------- ----------

Net sales to
 external
 customers (a)         38,944    81,186  147,634   231,121  3,780,430
Intersegment sales      6,204    60,445        3     5,406    157,973
Equity in net
 income of
 investees              1,483       575        -    50,731     81,283
Interest income            49     2,282       78    18,313     36,548
Interest expense      (2,070)  (12,137)  (4,126)  (43,482)  (126,644)
Net interest
 revenue (b)                -         -        -         -     29,515
Depreciation and
 amortization        (12,433)   (5,219)  (4,367)   (7,452)  (562,731)
Operating
 income/(loss)        (2,276)    24,501 (20,432)     8,178    906,062
Income tax
 (expense)/benefit    (1,282)  (13,562)    4,754  (32,230)  (266,436)
Investments in
 affiliates            21,972    52,038        -   920,926  1,461,317
Segment assets        557,810 2,160,068  539,626 4,821,811 33,655,027
Indebtedness (c)       84,380   897,164  211,304 2,128,827  9,160,634
Capital
 expenditures           4,452    53,717   10,826    41,415    980,437

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
For the three
 months ended        Mass     Real               Corporate
March 31, 2007       Media    Estate  Retail     and Other Total
------------------   -------- ------- ---------- --------- ----------

Net sales to
 external
 customers (a)         20,357  30,705     86,846   145,426  2,705,956
Intersegment sales      6,587   3,797          7     4,603     49,785
Equity in net
 income of
 investees              2,060       -          -      (60)     40,325
Interest income            46   7,157       -164    14,462     37,551
Interest expense      (1,230) (2,121)    (2,715)  (40,057)  (105,880)
Net interest
 revenue (b)                -       -          -         -     10,468
Depreciation and
 amortization         (3,712) (2,883)    (2,041)   (5,643)  (367,026)
Operating
 income/(loss)          1,317   4,109    (7,029)     7,410    733,305
Income tax expense       (37) (3,803)    (1,228)  (11,770)  (221,931)
Investments in
 affiliates             8,748   2,628          -   858,122  1,170,783
Segment assets        371,916 967,347    298,990 4,056,517 24,805,984
Indebtedness (c)       26,028 363,891    138,423 1,556,717  6,978,419
Capital
 expenditures           7,158  60,802      6,512    16,071    420,490
*T

-0-
*T

(a) - Interest income and expenses of the Banking segment are
 presented as revenues from financial services in the Group's
 consolidated financial statements.
(b) - The Banking segment derives a majority of its revenue from
 interest. In addition, management primarily relies on net interest
 revenue, not the gross revenue and expense amounts, in managing that
 segment. Therefore, only the net amount is disclosed.
(c) - Represents the sum of short-term and long-term debt
*T

Attachment A

Non-GAAP financial measures. This press release includes financial information
prepared in accordance with accounting principles generally accepted in the
United States of America, or US GAAP, as well as other financial measures
referred to as non-GAAP. The non-GAAP financial measures should be considered in
addition to, but not as a substitute for, the information prepared in accordance
with US GAAP.

Operating Income Before Depreciation and Amortization (OIBDA) and OIBDA margin.
OIBDA represents operating income before depreciation and amortization. OIBDA
margin is defined as OIBDA as a percentage of our net revenues. Our OIBDA may
not be similar to OIBDA measures of other companies; is not a measurement under
accounting principles generally accepted in the United States and should be
considered in addition to, but not as a substitute for, the information
contained in our consolidated statement of operations. We believe that OIBDA
provides useful information to investors because it is an indicator of the
strength and performance of our ongoing business operations, including our
ability to fund discretionary spending such as capital expenditures,
acquisitions of mobile operators and other investments and our ability to incur
and service debt. While depreciation and amortization are considered operating
costs under generally accepted accounting principles, these expenses primarily
represent the non-cash current period allocation of costs associated with
long-lived assets acquired or constructed in prior periods. Our OIBDA
calculation is commonly used as one of the bases for investors, analysts and
credit rating agencies to evaluate and compare the periodic and future operating
performance and value of companies within the wireless telecommunications
industry. OIBDA can be reconciled to our consolidated statements of operations
as follows:

-0-
*T
                                                     Jan -     Jan -
                                                     March     March
                                                       2008      2007
------------------------------------------------- --------- ---------

 Operating Income                                   881,299   728,479

------------------------------------------------- --------- ---------

 Depreciation and Amortization                    (562,732) (367,026)

------------------------------------------------- --------- ---------

 OIBDA                                            1,444,031 1,095,505
*T

(1) ROSNO and Perm Motors Group are accounted for as discontinued operation for
all periods presented. Thus, here and further, ROSNO's and Perm Motors Group's
financial results are excluded from all the captions presenting the Group's
consolidated results from continuing operations.

(2 )See Attachment A for definitions and reconciliation of OIBDA and OIBDA
margin and a reconciliation of OIBDA to their most directly comparable US GAAP
financial measures.

(3) Here and further, in the comparison of period to period results of
operations, in order to analyze changes, developments and trends in revenues by
reference to individual segment revenues, revenues are presented on an
aggregated basis, which is revenues after the elimination of intra-segment
(between entities in the same segment) transactions, but before inter-segment
(between entities in different segments) eliminations, unless accompanied by the
word 'consolidated'. Amounts attributable to individual companies, where
appropriate, are shown prior to both intra-segment and inter-segment
eliminations and may differ from respective standalone values due to certain
reclassifications and adjustments.

(4 )Here and further net income / (loss) for the segments are presented after
the Group's minority interests attributable to the segments.

(5) Turnover comprises the total proceeds from all service agreements, including
agency agreements.