Sistema Mass Media Acquires Regional Cable Operator.

MOSCOW -- Sistema (LSE:SSA), the largest private sector consumer services company in Russia and the CIS, announced today that its Sistema Mass Media business has acquired 100% minus 1 share of Esta for a cash consideration of approximately US$ 8.6 million. Esta operates cable TV networks in Tver, Kaluga and three cities in the Arkhangelsk Region (Severodvinsk, Koryazhma and Mirny).

"The acquisition of Esta is a logical step in the further development of Sistema's media assets," commented Alexander Leiviman, CEO of Sistema Mass Media.

Esta's networks are based on the MMDS technology and were rolled out between 1999 and 2004. With approximately 217,000 subscribers, the company is the market leader in each of the regions in which it operates. Sistema Mass Media acquired 50.05% of the company's shares from individual investors and 49.95% from the European Bank for Reconstruction and Development.

For further information, please visit www.sistema.com

Sistema is the largest private sector consumer services company in Russia and the CIS, with over 45 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 5.7 billion for the full year 2004, and total assets of US$ 8.8 billion as at December 31, 2004. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "CUCT" on the Moscow Stock Exchange (MSE).

Sistema Mass Media, which manages Sistema's media assets, operates in several media segments - advertising (Maxima advertising agency, TV-Project), print distribution (Nasha Pressa), newspaper publishing (Literaturnaya Gazeta, Metro, Rossiya), and multimedia (Sistema Multimedia).

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not 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 our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.