SITRONICS Establishes Joint Venture with ZTE Corporation

JSC SITRONICS (SITRONICS or the "Group”) (LSE: SITR), a leading provider of telecommunications, information technology and microelectronic solutions in Russia and the CIS, with a growing presence in other EEMEA emerging markets, today announced that it has established the SITRONICS-ZTE Ltd., a joint venture with ZTE Corporation, which is the largest telecommunications equipment supplier in the People’s Republic of China.

SITRONICS-ZTE will focus on the development and production of telecommunications equipment, CDMA terminals and specialised electronic products. The joint venture expects to launch a research and development centre.

The joint venture company will be established in the city of Hangzhou in the East of China. SITRONICS holds a 51% stake in the joint venture, with ZTE Corporation owning the remaining 49%. The Company’s Board of Directors will comprise three representatives from SITRONICS and two from ZTE Corporation. Hurem Nihad, a member of SITRONICS’ Board of Directors, has been appointed as Chairman of the joint venture company’s Board of Directors. ZTE Corporation’s representative will be appointed as CEO, and SITRONICS’ representative will be appointed as CFO.

Sergey Aslanian, President and Chief Executive Officer of SITRONICS, commented: "This joint venture is one of our key projects and is in line with our strategic development plan. It will enable us to migrate our mass manufacturing and production capacity from Europe to South-East Asia, thereby improving efficiency levels and reducing costs.”

For further information, please visit www.sitronics.com.

SITRONICS is a leading provider of telecommunication solutions, including software, equipment and systems integration, IT solutions and microelectronic solutions in Russia and the Commonwealth of Independent States with a strong presence in Central and Eastern Europe and a growing presence in the Middle East and Africa.

SITRONICS serves over 3,500 clients, maintains offices in 32 countries and exports its products and services to more than 60 countries. SITRONICS has over 11,000 employees of whom approximately 4,500 are involved in research and development.

SITRONICS’ key Telecommunication Solutions operations are based in Prague, Czech Republic and Athens, Greece, while the company’s IT Solutions and Microelectronic Solutions divisions are based in Kiev, Ukraine and Zelenograd, Russia respectively.

SITRONICS generated revenues of US$ 926.8 million for the six months ended June 30, 2008 and had total assets of US$ 2.2 billion at the end of the period. SITRONICS is majority owned by Sistema, the largest public diversified corporation in Russia and the CIS, which manages fast growing companies operating in the consumer services sector.

SITRONICS has developed strategic alliances in its home markets with Cisco Systems, STMicroelectronics, Infineon and Giesecke & Devrient in relation to certain products and services. SITRONICS has vendor relationships with Siemens, Ericsson, Motorola, ORACLE, Intel, Sun Microsystems and Microsoft. Key customers include Sistema group companies, such as MTS, Comstar UTS and MTT, and also OTE, Cosmote, Vodafone, Ericsson, Arcelor Mittal (formerly Mittal Steel) and TCL.

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 SITRONICS. 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 expressions. These statements are only predictions and actual events or results may differ materially. We do not intend to or undertake any obligation 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, and other factors specifically related to SITRONICS and its operations.