Sistema Announces New Organizational Structure

Sistema (LSE:SSA), the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector, today announced that its Board of Directors approved a new organizational structure of the Company at its meeting on July 26, 2008. Sistema adopted a matrix model and formed three new operating units in addition to functional divisions. These units will be responsible for the management of Sistema’s subsidiaries. The operating unit "Telecommunications Assets”, previously the Telecommunications Assets Development unit, headed by Vitaly Savelyev, First Vice President of Sistema, will be responsible for the development and implementation of Sistema’s telecommunications strategy, as well as management of telecommunications and media assets, including MTS, Comstar-UTS, Sistema Mass Media, and other companies in Russia, as well as Shyam Telelink, Sistema’s subsidiary in India. The operating unit "Consumer Assets” will focus on the development of companies in the consumer sector, including Detsky Mir, Intourist, MEDSI and MBRD, as well as Sistema Hals. The Board of Directors has appointed Felix Evtushenkov as Vice President of Sistema to head this unit. The operating unit "High Technologies and Industry” will be engaged in Sistema’s high tech and venture projects, as well as private-public partnerships. This unit, headed by Sergey Boyev, Vice President of Sistema, will also oversee Sitronics and RTI Systems. The new organizational structure of Sistema will comprise the following functional divisions: Strategy and Development, headed by Anton Abugov, First Vice President Finance, Alexey Buyanov, Senior Vice President Property, Sergei Drozdov, Senior Vice President Legal, Anna Goldin, Vice President External Relations, Sergey Cheremin, appointed as Senior Vice President Administrative, Ruslan Almakaev, Vice President Corporate Communications, Gennady Frolov Internal Control and Audit, Olga Shurygina All above mentioned managers of operating units and functional divisions will report directly to Leonid Melamed, President and CEO of Sistema. Leonid Melamed, President and Chief Executive Officer of Sistema, commented: "The adoption of these changes to the organizational structure completes the process of reorganization, which was started a year ago, and underlines our efforts to improve the efficiency of asset management and simplify our corporate structure. The adopted matrix model of the organization is aimed at achieving greater participation and control over the execution of the strategy in daughter companies, increasing motivation and responsibilities of the Corporate centre’s senior management in the decision making process in target markets, as well as optimizing business development expenditures through synergies and consolidation of management resources.” For further information, please visit www.sistema.com 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.