MEGAFON : BOARD OF DIRECTORS APPROVES TENDER OFFER BY ITS SUBSIDIARY FOR ITS ORDINARY SHARES AND GDRS AND DELISTING OF ITS GDRS

The programme to purchase ordinary shares and GDRs will be carried out by MegaFon Investments (Cyprus)
Limited ('MICL'), a wholly-owned subsidiary of the Company, by way of a tender offer to purchase for cash up
to 128,950,036 of the issued and outstanding ordinary shares and GDRs, representing 20.8% of the Company's
issued and outstanding shares. The purchase price for securities tendered will be US$9.75 for each ordinary
share and for each GDR. The tender offer will commence on 16 July 2018 and is expected to expire on 22 August
2018. The tender offer will be made by MICL to all holders of ordinary shares and GDRs, other than ordinary
shares or GDRs held by USM Holdings, Gazprombank Group and the GDRs currently owned by MICL.

On 13 July 2018, the Purchase Price represented a cash premium of US$2.03 or 26.3% per ordinary share to the
3-month volume weighted average price of US$7.72 for the period ending on 13 July 2018, using MOEX daily
closing ruble/dollar exchange rates in effect as of the respective period ending on 13 July 2018, and a cash
premium of US$1.64 or 20.3% with respect to the closing price per ordinary share on the Moscow Exchange on
13 July 2018. On 13 July 2018, the Purchase Price represented a cash premium of US$0.98 or 11.1% per GDR
to the 3-month volume weighted average price of US$8.77 for the period ending on 13 July 2018 and a cash
premium of US$0.75 or 8.3% with respect to the closing price per GDR on the LSE on 13 July 2018.

On 15 July 2018, Morgan Stanley & Co. International plc delivered to the Special Committee and the Board of
Directors its opinion that as of such date the consideration to be received by the securityholders to whom the
tender offer is addressed is fair from a financial point of view to such securityholders.

The Company intends to commence the process of cancelling the GDR listing shortly after the completion of the
tender offer. MegaFon may also review whether or not to maintain the GDR programme following the cancellation
of the listing, taking into consideration, among other things the amount of GDRs still outstanding, and no
assurance can be given that the programme will be maintained. Due to the complexity and potential costs of
delisting the ordinary shares from the Moscow Exchange, the Board of Directors has not decided on such a
delisting at this time. MegaFon will re-visit the question of delisting of the ordinary shares from the Moscow
Exchange following completion of the tender offer.

In May 2017, MegaFon announced a change in its business strategy from a traditional telecom operator into an
operator of digital opportunities. The Company's strategic goal is to be the leader in the creation of a digital
ecosystem in Russia, which may require broader partnerships with state-owned corporations, transactions with
higher risks, investments in infrastructure with lower returns, higher leverage and a greater need to use cash for
implementation of the strategy which would lead to the elimination of the payment of dividends.

The tender offer announced today by the Company's subsidiary provides an exit opportunity for holders of
ordinary shares and GDRs at a premium to current trading prices, before the GDR delisting, the possible
termination of the GDR programme, a possible ordinary shares downgrade from their current Level 1 listing to a
Level 3 listing on the Moscow Exchange and a possible ordinary share delisting in the future.

Securityholders are urged to evaluate carefully all information in the tender offer memorandum and related
documentation to be published by MICL, consult their own investment and tax advisers and make their own
decisions whether to tender or refrain from tendering their ordinary shares and/or GDRs.

Copies of the Tender Offer Memorandum, the Letter of Transmittal and Corporate Action Notice are or will be
available at the dedicated website at: www.micltenderoffer.com.

Commenting on today's announcement, Gevork Vermishyan, Executive Director of MegaFon, said:

'Proposed delisting reflects the scale of strategic change we need to make in order to complete MegaFon's
transformation into a digital business at the heart of a new digital ecosystem in Russia.

While we have delivered on the immediate objectives of the transformative strategy we announced in May 2017,
it is clear that the ambitious scale and nature of the further steps we may need to take to achieve this, could
create significant additional risk for our minority equity holders. It could negate the delivery of our current OIBDA
and revenue growth and leverage cap objectives over the medium term, and necessitating the diversion of funds
towards acceleration of our strategy and away from our prior dividend payout policy. In view of this and the
ongoing volatile external environment for our equity, the Board has concluded that given the situation it is
appropriate to offer our minority holders an exit opportunity at a premium to current trading prices if they wish to
take it.'

The Company will host a conference call for analysts and institutional investors to discuss the decisions taken
by the Board and approval of the tender offer at 10.00 (New York) / 15.00 (London) / 17.00 (Moscow).

To access the call please dial in using the following details:

Local - Moscow, Russia +7 495 646 9315

Local - London, United Kingdom +44(0) 20 7194 3759

Local - New York, United States of America +1 646 722 4916

Access Confirmation Code 82995828#

Replay facilities will be available for 7 days using the following details:

Local - Moscow, Russia +7 495 249 1671

Local - London, United Kingdom +44 20 3364 5147

Local - New York, United States of America +1 646 722 4969

Access code 418777676#

For More Information:

Notes to Editors

MegaFon PJSC is a leading Russian integrated telecommunication service provider, 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. MegaFon is traded on the Moscow Exchange and the London Stock Exchange under the symbol MFON. Additional information about MegaFon and the products and services provided by MegaFon can be found at: http://www.megafon.ru.

Cautionary Statement Regarding Forward Looking Statements

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.

Statement Regarding Inside Information

This announcement contains inside information. The subject matter, the identity of the issuer, the identity of the persons making the notification and their titles, and the date and time of the notification are all as set forth above

NEITHER THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION ('SEC') NOR ANY U.S. STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED OF THE TENDER OFFER MEMORANDUM, PASSED UPON THE FAIRNESS OR MERITS OF THE TENDER OFFER OR DETERMINED WHETHER THE TENDER OFFER IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT AND THE TENDER OFFER MEMORANDUM IS ADDRESSED EXCLUSIVELY TO THE HOLDERS OF ORDINARY SHARES OR GDRS OF PJSC 'MEGAFON'. NEITHER THE TENDER OFFER MEMORANDUM NOR THE TENDER OFFER DESCRIBED THEREIN NOR ANY INFORMATION CONTAINED THEREIN CONSTITUTE AN OFFER ('OFERTA') PURSUANT TO RUSSIAN LAW, OR AN ADVERTISEMENT, OR AN OFFER OF SECURITIES TO AN UNLIMITED NUMBER OF PERSONS WITHIN OR OUTSIDE THE TERRITORY OF THE RUSSIAN FEDERATION, OR A VOLUNTARY TENDER OFFER OR MANDATORY TENDER OFFER UNDER RUSSIAN LAW. NEITHER THE TENDER OFFER MEMORANDUM NOR THE TENDER OFFER DESCRIBED THEREIN CONSTITUTE OR ARE INTENDED FOR PLACEMENT OR PUBLIC CIRCULATION OF SECURITIES OF FOREIGN ISSUERS IN THE RUSSIAN FEDERATION. GDRS OF PJSC 'MEGAFON', TO WHICH THE TENDER OFFER RELATES, ARE NEITHER REGISTERED IN THE RUSSIAN FEDERATION NOR ADMITTED TO PLACEMENT, PUBLIC PLACEMENT OR PUBLIC CIRCULATION IN THE RUSSIAN FEDERATION IN ACCORDANCE WITH ARTICLE 51.1 OF RUSSIAN FEDERAL LAW DATED 22 APRIL 1996 NO. 39-FZ 'ON THE SECURITIES MARKET' (AS AMENDED). THE TENDER AND PURCHASE OF GDRs OF PJSC 'MEGAFON' WILL BE CARRIED OUT EXCLUSIVELY IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN THE TENDER OFFER MEMORANDUM. ANY INFORMATION IN THIS ANNOUNCEMENT AND RELATED DOCUMENTS IN RESPECT OF GLOBAL DEPOSITARY RECEIPTS REPRESENTING THE ORDINARY SHARES OF PJSC 'MEGAFON' IS ADDRESSED IN THE RUSSIAN FEDERATION SOLELY TO PERSONS WHO ARE 'QUALIFIED INVESTORS' AS DEFINED IN THE RUSSIAN FEDERAL LAW DATED 22 APRIL, 1996 NO. 39-FZ 'ON THE SECURITIES MARKET' (AS AMENDED). THE TENDER OFFER IS BEING MADE TO SHAREHOLDERS OF PJSC 'MEGAFON' RESIDENT IN THE UNITED STATES IN RELIANCE ON, AND COMPLIANCE WITH, SECTION 14(E) OF THE EXCHANGE ACT AND REGULATION 14E THEREUNDER TO THE EXTENT APPLICABLE. THE TENDER OFFER IS BEING MADE IN THE UNITED STATES BY MEGAFON INVESTMENTS (CYPRUS) LIMITED AND NO ONE ELSE.

THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT IN JURISDICTIONS MAY BE RESTRICTED BY LAW AND THEREFORE PERSONS SHOULD INFORM THEMSELVES ABOUT THE LAWS OF THEIR JURISDICTION, AND OBSERVE ANY APPLICABLE REQUIREMENTS.

IN ACCORDANCE WITH RUSSIAN LAW AND PURSUANT TO RULE 14E-5 OF THE U.S. SECURITIES EXCHANGE ACT OF 1934 (THE 'EXCHANGE ACT'), AFFILIATES OF PJSC 'MEGAFON' THAT ARE NOT MEMBERS OF THE MEGAFON CONSOLIDATED GROUP AND OVER WHICH PJSC 'MEGAFON' DOES NOT EXERCISE CONTROL AND THEIR RESPECTIVE NOMINEES OR BROKERS (ACTING AS AGENTS), AND ANY ADVISOR TO PJSC 'MEGAFON' OR ANY OF ITS AFFILIATES AND ANY DEALER MANAGER IN THE TENDER OFFER OR ANY OF ITS AFFILIATES, AND ANY PERSON ACTING, DIRECTLY OR INDIRECTLY, IN CONCERT WITH ANY SUCH PERSONS, MAY FROM TIME TO TIME MAKE PURCHASES OF, OR ARRANGEMENTS TO PURCHASE, SECURITIES OTHER THAN PURSUANT TO THE TENDER OFFER, BEFORE OR DURING THE PERIOD IN WHICH THE TENDER OFFER IS OPEN FOR SUBMISSION OF TENDERS, SO LONG AS THOSE ACQUISITIONS OR ARRANGEMENTS COMPLY WITH APPLICABLE RUSSIAN LAW AND THE PROVISIONS OF AN EXCEPTION PROVIDED UNDER RULE 14E-5 OF THE EXCHANGE ACT. ANY OF THE PURCHASES REFERRED TO IN THIS PARAGRAPH MAY OCCUR EITHER IN THE OPEN MARKET AT PREVAILING PRICES OR IN PRIVATE TRANSACTIONS AT NEGOTIATED PRICES. INFORMATION ABOUT SUCH PURCHASES WILL BE DISCLOSED AS AND IF REQUIRED BY APPLICABLE SECURITIES LAWS. THE TENDER OFFER IS BEING MADE FOR THE SECURITIES OF A RUSSIAN COMPANY AND APPLICABLE DISCLOSURE REQUIREMENTS MAY BE DIFFERENT FROM U.S. DISCLOSURE REQUIREMENTS. IN ADDITION, U.S. INVESTORS SHOULD BE AWARE THAT THE TENDER OFFER MEMORANDUM HAS BEEN PREPARED IN A FORMAT AND STYLE, WHICH DIFFER FROM THE U.S. FORMAT AND STYLE. NEITHER THE SEC NOR ANY U.S. STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE TENDER OFFER OR PASSED UPON THE ADEQUACY OR COMPLETENESS OF THIS NOTICE OR ANY DOCUMENTATION RELATING TO THE TENDER OFFER. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

FURTHERMORE, THE PAYMENT AND SETTLEMENT PROCEDURE WITH RESPECT TO THE TENDER OFFER FOR ORDINARY SHARES DIFFERS FROM U.S. PAYMENT AND SETTLEMENT PROCEDURES, PARTICULARLY WITH REGARD TO THE DATE OF PAYMENT OF CONSIDERATION.

THIS ANNOUNCEMENT, AND ANY INVESTMENT ACTIVITY TO WHICH IT RELATES, IS AVAILABLE ONLY TO (I) PERSONS WHO ARE OUTSIDE THE UNITED KINGDOM, (II) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE 'ORDER'), (III) HIGH NET WORTH COMPANIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, (IV) PERSONS WITHIN THE SCOPE OF ARTICLE 43 OF THE ORDER, OR (V) ANY OTHER PERSONS TO WHOM IT MAY OTHERWISE LAWFULLY BE MADE UNDER THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS 'RELEVANT PERSONS'). THIS ANNOUNCEMENT MAY NOT BE ACTED OR RELIED ON IN THE UNITED KINGDOM BY ANYONE WHO IS NOT A RELEVANT PERSON.