Mobile TeleSystems (MTS) has become the first Russian operator to outsource its network operations, in a deal with Nokia Siemens Networks. The company aims to reduce its overall costs while increasing organizational flexibility, transparency and the predictability of its operational expenses. With this managed services agreement, MTS will be able to simplify its overall network operations model, which is especially important with the rollout of 3G services for millions of subscribers in Russia’s central region.

Mobile TeleSystems will outsource the daily operation and maintenance of its entire mobile network across Central Russia to Nokia Siemens Networks as part of a five-year managed services deal. Under the terms of the contract, MTS will transfer around 250 employees to Nokia Siemens Networks.

“Entering into a managed service agreement with Nokia Siemens Networks will allow MTS to substantially optimize network operations and increase efficiency while keeping service experience high for our customer base", commented Aleksander Popovsky, director of MTS Russia. “While managed services projects have already proved their efficiency worldwide, in Russia the experience of such project implementation will be unique and innovative. That is why we'll attentively follow up the progress in its development under local conditions. In the future this will allow us to make the decision on introducing this approach to other regions.”

“Our managed services offering enables our customers to simplify their operations and focus on their core business while they delegate daily operations to us,” commented Ashish Chowdhary, head of Global Services at Nokia Siemens Networks. “We are especially excited about this deal since it not only confirms our services leadership in the region, but is another example of the growing trend among major mobile and fixed operators to explore this dynamic outsourcing model.”

Nokia Siemens Networks currently has over 240 managed services contracts in mobile and fixed networks, servicing more than 300 million subscribers on its customers’ networks.

Nokia Siemens Networks has one of the world’s largest services organizations, with more than 28,000 services employees in 150 countries serving over 600 customers. Nokia Siemens Networks’ services business accounts for about 45% of the company’s overall sales.

About Mobile TeleSystems

Mobile TeleSystems OJSC (“MTS”) is the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, the Company services over 97.81 million subscribers. The regions of Russia, as well as Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan, in which MTS and its associates and subsidiaries are licensed to provide GSM services, have a total population of more than 230 million. Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT).