Megafon : Statement with respect to press speculation on Euroset

As previously announced by MegaFon, as a result of the agreement reached between MegaFon and Vimpelcom, announced on 12 July 2017, MegaFon will acquire VimpelCom's 50% interest in Euroset, resulting in MegaFon owning 100% of Euroset.

MegaFon notes that there has been press speculation regarding its plans for Euroset following the completion of its agreement with Vimpelcom.

In anticipation of the successful completion of that agreement, which is subject to satisfaction of various conditions precedent, MegaFon confirms that it has been considering a number of strategic options with respect to Euroset and its possible combination with other market players, including multibrand mobile retailer Svyaznoy. Multibrand is a strategically important distribution channel for MegaFon and an important pillar of its new digital strategy. Cooperation with a successful multibrand player can help MegaFon to get better access to digital subscribers, develop a deeper understanding of customers' needs and improve the quality of service.

An announcement with respect to MegaFon on Euroset plans will be made at the appropriate time.

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NOTES TO EDITORS

MegaFon PJSC is a leading Russian provider of integrated digital services, operating in all segments of the telecommunications markets in Russia, and in the Republics of Abkhazia, South Ossetia and Tajikistan. MegaFon is a recognized market leader in the provision of mobile data services, was the first operator in Russia to launch commercial operation of a third generation (3G) network and was the first operator in the world to launch commercial operation of an LTE-Advanced (4G) data network. In February 2017, MegaFon acquired a 15.2% equity interest (which represented 63.8% of the voting shares) in Mail. Ru, a leading company in the Russian-speaking internet market. MegaFon is traded on the Moscow Stock Exchange and the London Stock Exchange under the symbol MFON. Mail. Ru is traded on the London Stock Exchange under the symbol MAIL. Additional information about MegaFon and the products and services provided by the telecom segment can be found at http://www.megafon.ru and information related solely to Mail. Ru can be found at http://www.mail.ru.

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Some of the information in this document may contain or refer to projections or other forward-looking statements regarding future events or the future financial performance of the Company. You can identify forward looking statements by terms such as 'expect', 'believe', 'anticipate', 'estimate', 'forecast', 'intend', 'will', 'could', 'may', or 'might' the negative of such terms or other similar expressions. The Company wishes to caution you that these statements are only predictions, and are based upon various assumptions which are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control. We may not achieve or accomplish these plans or predictions. The Company does not necessarily 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 projections or forward-looking statements of the Company, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries in which the Company operates, as well as many other risks specifically related to the Company and its business and operations.

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