Axalto Signs a Contract to Supply 20 million SIM Cards to MTS.

AMSTERDAM, Netherlands -- Axalto (Euronext NL0000400653 - AXL) the world's number one provider of microprocessor cards announces today that it has signed an agreement to provide 20 million SIM cards to MobileTeleSystems (MTS), the largest mobile phone operator in Russia and the CIS. The deliveries are scheduled to start from the fourth quarter of 2004 .

Philippe Cambriel, Axalto's President EMEA commented: "We are particularly pleased to have been chosen by MTS as a strategic partner. Axalto will be playing a key role in accompanying MTS' commercial strategy aimed at providing secure and personalized services to their customers. Axalto's large-scale industrial expertise, product quality and ability to provide a tailor-made service were key factors in MTS' decision to entrust Axalto for such a large contract."

Mikhail Susov, MTS' Vice President and Chief Marketing Officer, said: "In addition to supplying MTS with SIM cards, Axalto provides us with an experienced partner to jointly develop various new SIM card-based value-added services."

About Axalto

Axalto (Euronext: NL0000400653 AXL) is the world's leading provider of microprocessor cards (Gartner Dataquest 2004) -- the key to digital networks -- and a major supplier of point-of-sale terminals. Its 4500 employees come from 70 nationalities and serve customers in more than 100 countries, with worldwide sales reaching 3 billion smart cards to date. The company has 25 years' experience in smart card innovation and leads its industry in security technology and open systems.

Axalto continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Microprocessor cards provide convenience, security and privacy to public and private services operators, their customers and end users.

About MTS

Mobile TeleSystems OJSC ("MTS") is the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, the Company services over 29.50 million subscribers. The regions of Russia, as well as Belarus, Ukraine and Uzbekistan, in which MTS and its subsidiaries are licensed to provide GSM services, have a total population of approximately 225.8 million. Since June 2000, MTS' Level 3 ADRs have been listed on the New York Stock Exchange with the ticker symbol MBT. Additional information about MTS can be found on MTS' website at www.mtsgsm.com.

MTS will be using Axalto's Simera SIM cards as part of its widely successful JEANS brand. Axalto's Java-enabled cards will be notably decisive in managing the complexity of the multiple SIM profiles involved with MTS' popular nationwide program.