Sistema Annual Shareholder Meeting Approves Dividend Payment for 2006

Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, today announced the decisions made at the Annual General Meeting of its shareholders ("AGM”) on June 30, 2007. The AGM approved an annual dividend of RUR 48.0 per ordinary share, or approximately US$ 0.038 per Global Depositary Receipt ("GDR”), for the twelve months ended December 31, 2006, to be paid to holders of Sistema’s shares as at the record date of May 12, 2007. The dividend payment, which amounts to approximately RUR 463.2 million or approximately US$ 17.9 million, represents approximately 2% of Sistema's US GAAP consolidated net income for the full year 2006 and is due to be paid within 60 days of today’s AGM approval. The shareholders also approved the election of the members of the Board of Directors as follows: Vladimir Evtushenkov – Chairman Alexander Goncharuk - Chief Executive Officer Evgeny Novitsky - Non-executive Director Dmitry Zubov - Non-executive Director Vyacheslav Kopiev - Non-executive Director Alexander Leiviman - Non-executive Director Sergey Drozdov - Senior Vice President Alexander Gorbatovsky – Non-executive and Independent Director Stephan Newhouse – Non-executive and Independent Director Ron Sommer – Non-executive and Independent Director In addition, the AGM approved the election of the members of the Audit Committee and approved a new version of the Company’s Charter. Audit-Garantia-M was appointed as Sistema's Russian Accounting Standards auditor for 2007, and Deloitte & Touche was appointed as Sistema's US GAAP auditor for 2007. At the statutory Board meeting following the AGM, the Sistema’s Board of Directors re-elected Vladimir Evtushenkov as Chairman and Vyacheslav Kopiev and Dmitry Zubov as the Deputy Chairmen of the Board of Directors. For further information, please visit www.sistema.com Sistema is the largest private sector consumer services company in Russia and the CIS, with over 75 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 10.9 billion for the full year of 2006, and total assets of US$ 20.1 billion as at December 31, 2006. Sistema’s shares are listed under the symbol "SSA” on the London Stock Exchange, under the symbol "AFKS” on the Russian Trading System (RTS), and under the symbol "SIST” on the Moscow Stock Exchange (MSE). Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect,” "believe,” "anticipate,” "estimate,” "intend,” "will,” "could,” "may” or "might” the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations. Information contained in this announcement does not constitute a public offer or an advertisement of securities in Russia, is not an offer, or an invitation to make offers, to purchase any securities in Russia. The reverse convertible certificates have not been and will not be registered in Russia and are not intended for "placement” or "public circulation” in Russia.