UK Regulatory Announcement




  *Secured 8 circles, with 3 carrier slots of 1.25 Mhz each
  *Final footprint to service 40% of country’s population, address over 60%
    of data potential and safeguard 75% of SSTL’s current revenues.
  *3 circles to close with resulting operations to consist of 9 circles
  *Licence cost reduced to US$ 368 million (approx.) net of previous licence

Moscow, Russia – March 11, 2013 – Sistema JSFC (“Sistema”, or the “Group”)
(LSE: SSA), the largest publicly-traded diversified holding company in Russia
and the CIS, today announces that the Group’s Indian telecom subsidiary,
Sistema Shyam TeleServices Limited (“SSTL” or the “Company”), has won a
spectrum in the 800 Mhz band in 8 circles following its participation in
today’s licence auction.

The circles won by SSTL include Delhi, Kolkata, Gujarat, Karnataka, Tamil
Nadu, Kerala, Uttar Pradesh (West) & West Bengal. The Company’s operational
footprint will also include the Rajasthan circle which was not affected by the
Supreme Court of India’s order dated February 2, 2012. When bidding for the
spectrum, SSTL carefully considered a range of variables including spectrum
pricing, number of carrier slots available, levels of competition, future data
potential in the circles, etc. Based on such criteria, the Company decided not
to bid for Mumbai, Maharashtra and Uttar Pradesh (East) and will immediately
inform its customers of the closure of SSTL operations in those circles. As a
result, SSTL’s final footprint will include 3 carrier slots of 1.25Mhz each in
9 circles, servicing 10.45 million of its customers.

For the 8 circles won by SSTL in the spectrum auctions today, the Company will
be required to pay a total of approx. US$ 665 million (INR 3,639 crores) for a
licence period of 20 years. The terms include payment of 25% of the final bid
amount within 10 days, followed by a payment moratorium until March 2016,
after which the balance amount will be paid in 10 equal annual installments.
The Government of India has confirmed that SSTL will be able to set off the
previous licence cost of approx. US$ 297 million (INR 1,626 crores) against
the new spectrum cost.

The spectrum in 8 circles is technologically neutral and is valid for 20
years. This provides an opportunity to strengthen SSTL’s data driven strategy
through a possible LTE roll out in the future. Moreover, the selected circles
account for over 60% of the current data market in India.

SSTL intends to provide a more detailed operational update on the new
footprint and future strategy before Sistema’s annual results on 16^th April.

Mikhail Shamolin, President and CEO of Sistema commented:

“Today’s news is an important result which highlights the success of our
strategy as SSTL’s operations will now focus on the most prospective regions,
servicing 40% of the country’s population, amounting to over 60% of the data
market whilst also maintaining 75% of the company’s revenues. Crucially, this
outcome results in no upfront cash licence cost, substantially reduced
operating losses and a clearer roadmap for SSTL’s profitability. We look
forward to providing more details about SSTL’s resulting footprint in due


For further information, please visit or contact:

Investor Relations        Public Relations

Evgeniy Chuikov           Vsevolod Sementsov
Tel.: +7 (495) 692 1100   Tel.:+7 (495) 730 1705   

Sistema is the largest publicly-traded diversified holding company in Russia
and the CIS, which invests in and is a major shareholder of companies serving
over 100 million customers in the sectors of telecommunications, high
technology, oil and energy, radars and aerospace, banking, retail, mass-media,
tourism and healthcare services. Founded in 1993, the company reported
revenues of US$ 8.8 billion for the third quarter of 2012, and total assets of
US$ 46.3 billion as at September 30, 2012. Sistema’s global depository
receipts are listed under the symbol “SSA” on the London Stock Exchange.
Sistema’s ordinary shares are listed under the symbol “AFKS” on the MICEX-RTS
Stock Exchange, and under the symbol “SIST” on the Moscow Stock Exchange
(MSE). Sistema was ranked number 315 in the 2011 edition of the Fortune Global
500 list. Website:

The Company is not an investment company, and is not and will not be
registered as such, under the U.S. Investment Company Act of 1940.

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

This document does not constitute or form part of any offer or invitation to
sell or issue, or any solicitation of any offer to purchase or subscribe for,
any shares or other securities of JSFC Sistema and/or any of its subsidiaries
and affiliated companies, nor shall any part of it nor the fact of its
distribution form part of or be relied on in connection with any contract or
investment decision relating thereto, nor does it constitute a recommendation
regarding the shares or securities of JSFC Sistema and/or any of its
subsidiaries and affiliated companies.


JSFC Sistema
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