MegaFon OAO GDR : MegaFon Announces Purchase of Shares by its CEO, Ivan Tavrin

MOSCOW, Russia (17 May 2013) - OJSC MegaFon («MegaFon» or the «Company») announces the exercise by its CEO Ivan Tavrin of his option to purchase an additional 1.25% interest in the Company. The shares, converted to GDRs, were acquired by a company owned by Mr. Tavrin at the IPO offer price, corresponding to $20 per share, for a total purchase price of $155 million, from MegaFon Investments (Cyprus) Limited, a wholly-owned subsidiary of the Company. As a result of the completion of the transaction, Mr. Tavrin's beneficial interest in the Company reached 2.5%, while the interest of MegaFon Investments (Cyprus) Limited has been reduced to 7.57%.

This purchase is pursuant to a long-term incentive plan, duly approved by the Company's Board of Directors on 30 November 2012, under which Mr. Tavrin is given the option to purchase up to 5% of the Company's share capital.

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NOTES TO EDITORS

MegaFon OJSC is a leading Russian universal telecommunication service provider, operating in all segments of the telecommunications markets in Russia. MegaFon was incorporated in June 1993 as CJSC "Northwest GSM" and renamed OJSC "MegaFon" in 2002. MegaFon was the first operator with a network covering all regions of Russia. The Company and its subsidiaries have licenses to operate in all of the Russian regions and in the Republics of Abkhazia, South Ossetia and Tajikistan. The Company was the first in Russia to launch 3G for commercial operations and is currently in the number one position among all operators in the provision of mobile Internet, and in the number two position as to the number of active subscribers in Russia.

In 2009, MegaFon was selected as the Mobile General Partner of the XXII Winter Olympic Games and XI Paralympic Games to be held in Sochiin2014.

As a result of its acquisition of the Synterra Group, one of the leading Russian backbone operators, in June 2010, MegaFon substantially increased its fixed-line B2B and B2G businesses, as well as its provision of fixed broadband services. In July 2012 MegaFon was awarded one of four ten-year licenses for the provision of 4G/LTE services throughout the entire Russian Federation and, through its MVNO arrangement with Yota, has already started providing these services in 81 towns and cities in 29 different regions by the end of March 2013. In September 2012 the Company acquired the VAS Media group of companies, which are now being integrated with MegaLabs, its R&D subsidiary. In December 2012 the Company acquired a 25% interest in the Euroset retail chain, the largest chain in Russia providing telecommunications goods and services, and is committed to acquire a further 25%within the next three years.

In November 2012 MegaFon successfully completed an initial public offering on the Moscow Stock Exchange and the London Stock Exchange. As of 31 March 2013, MegaFon has two principal shareholders, companies in the AF Telecom group (approximately 50.01%) and the TeliaSonera group (approximately 25.17%). Additional shares are held by its CEO, Ivan Tavrin (2.50%) and by a wholly owned subsidiary of the Company (7.57%, of which Mr. Tavrin has the right to acquire up to 2.50% at various times prior to 2017), while the public float represents approximately 14.75% of the outstanding shares.