R 0 R 0 R 100 R 154 R 203 Darker Darker MegaFon G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217

R 87 R 113 R 140 R 171 R 207 Darker Darker Investor Presentation G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

September 2014

1 Disclaimer

Certain statements and/or other information included in this document may not be historical facts and may constitute “forward looking statements” within the meaning of Section 27A of the U.S. Securities Act and Section 2(1)(e) of the U.S. Securities Exchange Act of 1934, as amended. The words “believe”, “expect”, “anticipate”, “intend”, “estimate”, “plans”, “forecast”, “project”, “will”, “may”, “should” and R 0 R 0 R 100 R 154 R 203 Darker Darker similar expressions may identify forward looking statements but are not the exclusive means of identifying such statements. Forward G 152 G 179 G 194 G 212 G 232 50% 25% looking statements include statements concerning our plans, expectations, projections, objectives, targets, goals, strategies, future B 95 B 128 B 155 B 185 B 217

R 87 R 113 R 140 R 171 R 207 events, future revenues, operations or performance, capital expenditures, financing needs, our plans or intentions relating to the Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% expansion or contraction of our business as well as specific acquisitions and dispositions, our competitive strengths and weaknesses, B 140 B 161 B 180 B 201 B 227 the risks we face in our business and our response to them, our plans or goals relating to forecasted production, reserves, financial R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 position and future operations and development, our business strategy and the trends we anticipate in the industry and the political, 50% 25% B 0 B 140 B 168 B 196 B 224 economic, social and legal environment in which we operate, and other information that is not historical information, together with the assumptions underlying these forward looking statements. By their very nature, forward looking statements involve inherent risks, uncertainties and other important factors that could cause our actual results, performance or achievements to be materially different from results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the political, economic, social and legal environment in which we will operate in the future. We do not make any representation, warranty or prediction that the results anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. We expressly disclaim any obligation or undertaking to update any forward-looking statements to reflect actual results, changes in assumptions or in any other factors affecting such statements.

2

Agenda

What What MegaFon?is R 0 R 0 R 100 R 154 R 203 1. What is MegaFon? Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217

R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 2. Corporate and Financial Highlights for Q2 2014 50% 25%

B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25%

3. Appendix B 0 B 140 B 168 B 196 B 224

Corporate Highlights Financialand

Appendix

3 R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% 1 B 95 B 128 B 155 B 185 B 217 R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

What is MegaFon? 4

MegaFon at a glance

Highlights Consolidated H1 2014 revenue breakdown

Strong (1) (2)

• 2nd largest Russian mobile operator , with 68.0MM subscribers and RUB 151.5Bn What MegaFon?is fundamentals R 0 R 0 R 100 R 154 R 203 historically growing market share Darker Darker c.99% of revenues comes from G 152 G 179 G 194 G 212 G 232 50% 25% • Unique network position overall on the back of substantial investments B 95 B 128 B 155 B 185 B 217 Sales of handsets Wireless revenues; and accessories; R 87 R 113 R 140 R 171 R 207 • Leading /LTE operator providing access to 4G/LTE network in 67 86.5% Darker Darker 6.5% G 6 G 81 G 115 G 153 G 199 50% 25%

Russian regions, covering 48.2% of population by the end of August 2014 B 140 B 161 B 180 B 201 B 227

• Innovative player with a customer-centric approach and a leading position R 122 R 136 R 163 R 192 R 222 Wireline revenues; Darker Darker in digital services and content G 181 G 138 G 165 G 194 G 223 7.1% 50% 25% B 0 B 140 B 168 B 196 B 224 • Extensive retail network consisting of almost 7,900 stores, including more than 1,960 owned-and-operated stores, third party monobrand stores and Euroset stores Compelling historical financial performance

• Managed by a professional team with solid track record RUB Bn 2010 2011 2012 2013 2010-13 H1 2014

CAGR Corporate Highlights Financialand Total mobile • Listed on the London and stock exchanges since 27 Nov 2012 subscribers (MM) 57.2 62.8 64.6 70.1 7.0% 70.2 Consolidated revenue 215.3 242.4 272.3 297.2 11.3% 151.5 • Superior historical growth among Big 3 Russian mobile operators with Consolidated OIBDA 97.6 100.6 117.1 132.6 10.8% 66.8 Growth significant future growth potential Margin (%) 45.3% 41.5% 43.0% 44.6% 44.1% Capex (66.5) (70.6) (45.2) (47.1) (10.8%) 21.7 • Focus on improving operating efficiency and capital expenditure As % of revenues 30.9% 29.1% 16.6% 15.9% 14.4% Returns management which translates into growing cash flows OIBDA−Capex 31.1 30.0 71.9 85.4 40.0% 45.1 • Highly attractive shareholder remuneration policy: 90% dividend payout As % of revenues 14.4% 12.4% 26.4% 28.7% 29.7% ratio for 2013 Appendix

Source: Company data. Note: 5 (1) – By overall mobile revenues and number of subscribers as of July 2014 in Russia (2) – Total number of subscribers as of July 2014 was 70.2MM in Russia, , South Ossetia and Abkhazia 20 years of our success story to become a leading telecom operator in

Russia

Leading 4G

Acquisition of 100% provider in Russia What What MegaFon?is stake in Launch of 4G/LTE /Scartel General MegaFon total revenues services in partnership recommended for Communication What MegaFon?is shareholder vote R 0 R 0 R 100 R 154 R 203 (RUB Bn) with Yota, reached 76 partner for Darker Darker Olympics 2014 cities and towns by YE G 152 G 179 G 194 G 212 G 232 50% 25% 2012 Number of 4G B 95 B 128 B 155 B 185 B 217 subscribers hits 1 Acquisition of 25% million R 87 R 113 R 140 R 171 R 207 stake in Euroset Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% Acquisition of Start listing on the B 140 B 161 B 180 B 201 B 227 LSE and MICEX Net-by-Net

R 122 R 136 R 163 R 192 R 222 Acquisition of MegaLabs ~20x Darker Darker Synterra launches G 181 G 138 G 165 G 194 G 223 50% 25% operations B 0 B 140 B 168 B 196 B 224

Becomes #2 mobile Corporate Highlights Financialand 1st operator to operator in Russia in launch terms of subscribers network in 1st operator to Russia in St. cover all Peters- Launch of online regions in burg 297.2 store and Russia 272.3 Corporate Highlights Financialand st 1 operator in introduction of 242.4 Europe to launch EDGE technology st NorthWest GSM “MMS” and 1 acquired nine operator in Russia other regional to introduce “NorthWest “Mobile-TV” GSM” founded, GSM operators OperatingandResultsFinancial launched and renamed operations in St. MegaFon

Petersburg

1993 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Appendix Outlook for2014 6 Source: Company data.

Well-positioned to grow faster than the market

“We believe that MegaFon remains well-positioned to grow faster MegaFon share price performance since IPO(1)

than market on the back of superior spectrum allocation, and What MegaFon?is acceleration of investments should support revenue growth $40 whereas we see further potential for cost optimization.…“ What MegaFon?is R 0 R 0 R 100 R 154 R 203 $35 Darker Darker

G 152 G 179 G 194 G 212 G 232 July 2014, Goldman Sachs 50% 25% B 95 B 128 B 155 B 185 B 217 $30 +48%

R 87 R 113 R 140 R 171 R 207 $25 Darker Darker +19% G 6 G 81 G 115 G 153 G 199 “MegaFon’s management reiterated its guidance for 2014 and 50% 25% +4% B 140 B 161 B 180 B 201 B 227

looks on track to attain 6-8% revenue growth. Looking at 1H $20

numbers, and factoring in the trends we are seeing in Russian now, -12% R 122 R 136 R 163 R 192 R 222 $15 -15% Darker Darker we do believe MFON in on the right track to meet its guidance….” G 181 G 138 G 165 G 194 G 223 50% 25% July 2014, Bank of America Merrill Lynch B 0 B 140 B 168 B 196 B 224

$10 Corporate Highlights Financialand

Jul-13 Jul-14

Oct-13

Apr-13 Apr-14

Jan-13 Jan-14

Dec-12 Dec-13

Feb-13 Feb-14

Jun-13 Jun-14

Sep-13

Mar-13 Mar-14

Aug-13 Aug-14

Nov-12 Nov-13

May-13 May-14

“We keep our preference for MFON among Russian Telcos as it RTKM MICEX

offers fastest FCF growth (15% FCF CAGR 2014-16e) and attractive Corporate Highlights Financialand valuation at 4.5x (15e) EV/EBITDA and 9.2x (15e) EPS….” Shareholder structure as of July 31, 2014 July 2014, Morgan Stanley MegaFon owned stock;

Free Float; 3.92% Financial and OperatingandResultsFinancial “[MFON has] the best outlook among “Big 4” operators. Moreover, 14.71% with its focus on the Russian market, MegaFon has no direct exposure to Ukraine (as opposed to MTS and Vimpelcom ). This MegaFon CEO; AF Telecom, 2.54% 53.65%

should provide an additional support to the company’s stock…” July 2014, TeliaSonera; 25.17% Appendix

Source: Analyst research reports, Bloomberg, Company data Outlook for2014 7 (1) – as of August 27, 2014 Attractive Russian market in the early stages of digital

transition

Competitive telecom market dynamics MegaFon track record of gaining market share What What MegaFon?is • 3 nationwide mobile operators

Russian mobile subscribers market share What What MegaFon?is • Predominantly prepaid market, limited handset subsidies R 0 R 0 R 100 R 154 R 203 (Subscribers in millions) Darker Darker

G 152 G 179 G 194 G 212 G 232 • 50% 25% Relatively high OIBDA margin (compared to developed markets) 188 208 219 228 230 243 241 243 ∆ B 95 B 128 B 155 B 185 B 217 on the back of relatively benign competition and regulatory framework 34.4% R 87 R 113 R 140 R 171 R 207 33.4% Darker Darker 32.6% 31.5% 31.8% G 6 G 81 G 115 G 153 G 199 30.7% 30.9% 31.0% (2.6 pp) 50% 25% Benign regulatory framework B 140 B 161 B 180 B 201 B 227 28.0% 28.1% 28.0% 27.1% 27.1% +5.0 pp • Mobile termination rates, rates, and last mile fiber 25.4% 24.2% 25.8% (1) 25.1% R 122 R 136 R 163 R 192 R 222 access are not regulated 24.5% 23.7% 24.3% (2.3 pp) Darker Darker 23.0% 23.3% 22.8% 23.1% G 181 G 138 G 165 G 194 G 223 Others 50% 25% 18.0% 17.8% (0.1 pp) B 0 B 140 B 168 B 196 B 224 • Mobile number portability implemented relatively late in terms 17.2% 17.1% 17.6% 17.6% 17.7% 17.1% Corporate Highlights Financialand of market development(2): MFON is a net beneficiary of MNP with 2008 2009 2010 2011 2012 2013 Q1 2014 Q2 2014 more than 50K net additions in H1 2014 • Local loop unbundling is not implemented Total revenues 2013 Data revenues 2013 Russian market fundamentals Corporate Highlights Financialand 13.6% 4.5% East-Central Russia G7(4) Europe(3) 31.0% 23.9% 36.6% 29.3% GDP (CAGR 2014-2016E real change p.a.) 1.9% 2.8% 2.4% OperatingandResultsFinancial Private consumption (CAGR 2014-2016E 2.5% 1.8% 2.3%

real change p.a.) 26.1% 35.1%

Source: Company data, AC&M, EIU (as of August 01, 2014) Others Appendix Note: (1) - Government focus on MTR and potential roaming regulation is increasing

(2) - Fully implemented since April 2014 Outlook for2014 8 (3) - Includes Czech Republic, Hungary, Romania, Bulgaria, Poland, Slovakia (4) - Includes Canada, Germany, France, Italy, Japan, United Kingdom, United States Continuous 4G / LTE development boosting data revenue growth

4G+ • MegaFon was the first in the world to commercially launch the fastest mobile MegaFon data network LTE-Advanced – the newest standard of mobile Internet services st was the 1 to • 4G/ LTE Advanced was launched by MegaFon in February 2014 commercially launch 4G/LTE • A new brand name 4G+ has been developed specifically to promote MegaFon mobile Internet – the fastest mobile R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217 4G services R 87 R 113 R 140 R 171 R 207 (1) Federal districts covered by MegaFon 4G / LTE network Darker Darker • Available in 67 federal regions with 48.2% of Russia’s population as of Aug-14 G 6 G 81 G 115 G 153 G 199 50% 25% • 14 out of 15 cities in Russia with a population of more than 1 million B 140 B 161 B 180 B 201 B 227 67 • 2.2 million 4G subscribers consuming c.37.4% of total traffic in Q2 2014 67 Russia’s R 122 R 136 R 163 R 192 R 222 • In H1 2014, number of 4G base stations increased by 44% Darker Darker federal regions G 181 G 138 G 165 G 194 G 223 50% 25% covered LTE-roaming coverage B 0 B 140 B 168 B 196 B 224 • LTE-roaming coverage extended to 14 most popular travel destinations • We expect to open LTE-roaming in Germany, and by the end of * 2014 Integrated MegaFon and Yota network has the best coverage and fastest data network in Russia(2)

Increasing adoption of 4G devices Devices sold by MegaFon Retail • Promotion of higher data usage through stimulation of sales of data-enabled 100.0% 4.4x devices in controlled retail channels and introduction of data-consumption tariff 100.0% plans Sales of 4G devices • The share of data-enabled devices(3) on MegaFon network reached 36.7% of all 76.3% via MegaFon Retail devices in H1 2014 91.1% grew 4.4x Growth • Total number of 4G data-enabled devices sold through MegaFon Retail +14.8 p.p. increased 4.4x y-o-y in H1 2014 8.9% 23.7% • The share of 4G devices in the total number of data-enabled devices sold H1 2013 H1 2014 through MegaFon Retail grew by 14.8p.p. to 23.7%, out of which MegaFon 4G devices Non 4G devices customized devices represent 86%

Note: (1) — Russian population as of the latest census in October 2010 9 (2) — Tests conducted by AMC Company in 14 major Russian cities in Apr-May 2014 (3) — Include smartphones, tablets, dongles and routers, and other data-enabled devices (4) — According to the analysis conducted by independent company Vigo, monitoring quality of mobile Internet

Demonstrating strong operating and financial performance Operating results provided on this page cover only the Russian business; financial results are presented on a consolidated basis

Superior operating performance… …translating into solid financials What MegaFon?is

Total Russia wireless subscribers, MM Consolidated Revenue breakdown, RUB Bn What What MegaFon?is 68.1 64.1 68.0 R 0 R 0 R 100 R 154 R 203 61.6 62.6 272.3 297.2 Growth Darker Darker 242.4 G 152 G 179 G 194 G 212 G 232 18.1 ▲ 8.3% 50% 25% 25.2 26.1 17.9 13.3 18.6 B 95 B 128 B 155 B 185 B 217 19.1 21.0 22.4 15.2 8.4 140.0 151.5 7.6 9.8 R 87 R 113 R 140 R 171 R 207 241.1 260.5 9.2 10.7 Darker Darker 218.8 G 6 G 81 G 115 G 153 G 199 123.2 131.0 50% 25% B 140 B 161 B 180 B 201 B 227 2011 2012 2013 H1 2013 H1 2014 2011 2012 2013 H1 2013 H1 2014 (1) (2) R 122 R 136 R 163 R 192 R 222 Data service user base User base not using data service Wireless services Wireline services Equipment & Accessories Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25%

Blended Russia ARPU(3) and Blended MOU(4) Consolidated OIBDA and OIBDA margin Growth B 0 B 140 B 168 B 196 B 224 Corporate Highlights Financialand 344 349 331 ▲ 0.2% 288 299 47.6%

44.6% 44.1% 41.5% 43.0% 328 319 322 310 316

100.6 117.1 132.6 66.7 66.8 Corporate Highlights Financialand 2011 2012 2013 H1 2013 H1 2014 2011 2012 2013 H1 2013 H1 2014 ARPU, RUB per month MOU, minutes per month Russia Data ARPU (ARPDU(5)) and DSU(6) Consolidated Capex and capex margin Growth 29.1% 2,458 ▲ 75.0% 16.6% OperatingandResultsFinancial 1,586 1,264 15.9% 14.4% 1,068 8.9% 628 70.6 21.7

47.1 12.4 164 181 167 206 45.2

148 2011 2012 2013 H1 2013 H1 2014 2011 2012 2013 H1 2013 H1 2014 Data ARPU, RUB per month DSU, Mb/month Appendix

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed. (1) — Data Service User is defined as a Subscriber who has used any of our data transfer services within the preceding three months

(2) — Active subscribers that do not comply with the definition of Data Service User Base Outlook for2014 (3) — Total wireless services revenues (including interconnection and roaming charges but excluding connection revenues) for a given period divided by average number of wireless subscribers, divided by number of months in such period 10 (4) — The numbers starting from 2013 are calculated in accordance with the new methodology. The total number of minutes charged per the tariff plan of a subscriber during a given period divided by the average number of subscribers during such period and dividing the result by the number of months in such period. (5) — Total data revenues in a given period divided by average number of data service subscribers during such period, divided by number of months in such period (6) — Total number of megabytes transferred during a given period divided by average number of data subscribers during such period, divided by number of months in such period

MegaFon Strategy

Goal Priority

What What MegaFon?is What What MegaFon?is 1 Retention & development of current customer base through focus on the most valuable subscribers R 0 R 0 R 100 R 154 R 203 Darker Darker

G 152 G 179 G 194 G 212 G 232 50% 25% Sustain revenue B 95 B 128 B 155 B 185 B 217 growth in core 2 Focus on market share increase R 87 R 113 R 140 R 171 R 207 business Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% 3 B 140 B 161 B 180 B 201 B 227

Mobile data monetization

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25%

4 Focus on development of current B2B subscriber base B 0 B 140 B 168 B 196 B 224 Corporate Highlights Financialand

Develop 5 Development of B2C fixed broadband “second core”

6 Focus on real opportunities in new businesses Corporate Highlights Financialand

7 Continuous search and implementation of operational improvements Financial and OperatingandResultsFinancial Be more efficient than competitors in 8 Maintaining technological leadership

managing business

9 Development of management system focused on value creation

Appendix Outlook for2014 11 R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% 2 B 95 B 128 B 155 B 185 B 217 R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

Corporate and Financial Highlights for Q2 2014 12

Sustained data leadership and deleveraging on the back of solid results

Key corporate events in Q2 2014

Elimination of significant US-dollar liabilities and deleveraging LTE-roaming expansion What MegaFon?is • • Prepayment of 90% of the Scartel/Yota liability in cash on June 24, 2014 resulted Extension of international LTE-roaming coverage to 10 countries by the end of Q2 What MegaFon?is in removal of a $1.06 Bn US-dollar exposure and reduction of future interest 2014, including Brazil, Italy, Spain and Hong Kong R 0 R 0 R 100 R 154 R 203 Darker Darker

expense G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% New services to enhance customer satisfaction B 95 B 128 B 155 B 185 B 217 • Completion of settlement for the acquisition of 50% interest in Euroset using the • Launch of ELENA 24/7 virtual consultant service has led to reduction of waiting Company’s treasury shares on July 9, 2014 resulted in removal of a $0.6 Bn US- R 87 R 113 R 140 R 171 R 207 Darker Darker dollar exposure and reduction of future interest expense. As a result, the number time for B2C customers G 6 G 81 G 115 G 153 G 199 of the Company’s treasury shares went from 7.57% to 3.92% of share capital, and 50% 25% • Launch of VPLS (Virtual Private LAN Service) virtual circuit exchange permitting B 140 B 161 B 180 B 201 B 227 the interest of USM Holding increased from 50%+100 shares to 53.65% more efficient management of corporate networks R 122 R 136 R 163 R 192 R 222 Darker Darker Approval of final dividend for 2013 G 181 G 138 G 165 G 194 G 223 Recognition and awards 50% 25% B 0 B 140 B 168 B 196 B 224

• MegaFon’s Annual General Meeting of Shareholders, held on June 30, 2014, Corporate Highlights Financialand • MegaFon received the Grand-prix of Cannes Lions for the Megafaces project, a approved a final dividend for the 2013 financial year in the amount of RUB 64.51 large-scale LED kinetic facade on MegaFon’s Olympic Pavilion projecting 3D

per ordinary share (or GDR). Dividends are expected to be paid in August 2014 faces of the XXII Winter Olympic guests • The aggregate amount of dividends for 2013 is equal to RUB 74.85 per share (or • Next Generation Optical Networking Congress, the leading optical conference in GDR) with the dividend payout ratio for 2013 totaling c. 90%(1)

Europe, awarded MegaFon the prize «For Innovative Transcontinental 100G Corporate Highlights Financialand Assignment of “stable” outlook by Moody’s Investors Service Solution» for successful launch and development of the DREAM project that offers the most reliable and high-speed fiber-optic route extending for 8,700 km • Moody’s Investors Service changed its outlook on MegaFon to “stable” and between Europe and Asia with network capacity of up to 8 Tbit/s affirmed the investment grade rating at “Baa3” level

New contract for network expansion OperatingandResultsFinancial Quotation list upgrade / GDR headroom increase • A 7-year contract with Huawei was signed to purchase equipment and software • Following the listing reform on the Moscow Exchange, the Company’s shares

for /3G/LTE network construction and modernization. The contract is based on have been upgraded to the “Highest” quotation list QL-I, thus allowing pension (2) the Total Cost of Ownership concept and allows MegaFon to optimize network funds and state corporations to invest in MegaFon’s stock rollout costs and reduce maintenance expenses • The approved an increase of the maximum number of GDRs which are authorised to be issued under the Company’s depositary receipts Appendix

programme from 20% to 25% of the total number of ordinary shares outstanding Outlook for2014 Outlook for2014 13 All financial figures provided in this presentation are presented on consolidated IFRS basis unless otherwise stated. Note: (1) – Total dividend for 2013 as a percentage of profit for the year attributable to equity holders of the Company in accordance with IFRS. (2) – The total value of all direct and indirect costs associated with construction / acquisition and maintenance of assets over their entire life cycle.

Key highlights: stable revenue and net profit growth

Growth Growth Revenue, OIBDA and Net profit

▲ 6.1% ▲ 8.3% What What MegaFon?is 79.7 151.5 • In Q2 2014, MegaFon continued to demonstrate R 0 R 0 R 100 R 154 R 203 72.2 77.5 74.9 76.7 140.0 Darker Darker

G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand top-line growth Corporate Highlights Financialand 50% 25% Revenue B 95 B 128 B 155 B 185 B 217 • Revenue increased by 6.1% y-o-y largely due to R 87 R 113 R 140 R 171 R 207 Darker Darker strong growth in mobile data revenue and sales of G 6 G 81 G 115 G 153 G 199 50% 25%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014 equipment and accessories, and greater use of B 140 B 161 B 180 B 201 B 227

wireline services Growth R 122 R 136 R 163 R 192 R 222 Stable Darker Darker ▲0.2% G 181 G 138 G 165 G 194 G 223 • OIBDA was stable y-o-y, at RUB 34.3 Bn, while 50% 25% B 0 B 140 B 168 B 196 B 224 34.3 35.4 34.3 30.5 32.5 66.7 66.8 OIBDA margin decreased by 2.8 p.p. to 44.7%

47.5% 47.6% OIBDA 45.6% 43.4% 44.7% 44.1% impacted by consolidation of Scartel, and growing 38.3% share in revenue of lower-margin sales of

equipment and accessories and wireline services

Financial and OperatingOperatingandandResultsResultsFinancialFinancial H1 2013 H1 2014 Corporate Highlights Financialand Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 – At the same time OIBDA margin demonstrated Growth Lower positive q-o-q dynamics, increasing by 1.3 p.p. ▲ 2.2% ▼19.4% due to higher margin on sales of equipment 15.3 13.6 13.9 26.2 and accessories and lower general and 10.1 21.1 administrative expenses as percentage of

Net profit(1) 7.2

18.8% 19.8% 18.1% 18.7% 13.9%

12.6% 9.7% revenue

• Net profit(1) grew by 2.2% y-o-y to RUB 13.9 Bn

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

Appendix

OutlookOutlook forfor2014 2014 Quarterly data, RUB Bn Half-year data, RUB Bn % of Revenue 14 Note: Due to rounding, manual calculations for financials and KPIs(2) may differ from those displayed (1) — Net profit attributable to equity holders of the Company. (2) — Key performance indicators (“KPIs”)

Key highlights: resilient Free Cash Flow generation, despite CAPEX growth

Growth Growth ▲ 60.6% ▲ 75.0% CAPEX(1), OIBDA-CAPEX, Free Cash

23.9 21.7 What MegaFon?is R 0 R 0 R 100 R 154 R 203 Flow Darker Darker

G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 13.4 12.4 Corporate Highlights Financialand 50% 25% CAPEX 8.3 10.9 . In Q2 2014, MegaFon invested RUB13.4 Bn in 4G B 95 B 128 B 155 B 185 B 217 29.9% 8.4 17.5% 14.4% network rollout and modernisation of 2G and 3G 11.6% 14.0% 11.2% 8.9% R 87 R 113 R 140 R 171 R 207 networks Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014 B 140 B 161 B 180 B 201 B 227

. OIBDA-CAPEX decreased by 19.5% y-o-y due to R 122 R 136 R 163 R 192 R 222 Lower Lower CAPEX increase in Q2 2014 Darker Darker G 181 G 138 G 165 G 194 G 223 ▼ 19.5% ▼ 17.0% 50% 25% B 0 B 140 B 168 B 196 B 224 26.0 24.5 24.1 54.3 . Free Cash Flow decreased by 37.8% y-o-y due to 20.9 45.1 higher CAPEX spending in Q2 2014 and lower cash 38.8% OIBDA-CAPEX 35.9% 31.6% 29.7% flow from operating activities

6.7 32.2% 27.2% Financial and OperatingandResultsFinancial

8.4% OperatingandResultsFinancial Corporate Highlights Financialand

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

Lower Lower ▼ 39.3% ▼ 37.8% 28.0

22.6 45.4

13.6 14.0 27.6 36.2% 32.5% Free Cash Flow 31.2% 8.8 18.2%

11.1% 18.1% 18.3% Appendix

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

OutlookOutlook forfor2014 2014 Quarterly data, RUB Bn Half-year data, RUB Bn % of Revenue 15 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (1) – MegaFon CAPEX refers to actual CAPEX accrued for the year and may not match cash flow CAPEX.

Key drivers of revenue growth

• Wireless revenue increased by 4.3% y-o-y on the back of overall Strong momentum in mobile data revenue continues subscriber base growth of 6.4% y-o-y as of the end of Q2 2014 and robust growth in mobile data revenue Growth

― Mobile data was the key growth driver and represented 21.1% What MegaFon?is RUB Bn ▲ 6.1% R 0 R 0 R 100 R 154 R 203 of total revenue in Q2 2014 vs. 16.0% in Q2 2013, increasing by Darker Darker

0.1 G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 4.6 1.0 39.9% y-o-y due to: Corporate Highlights Financialand 50% 25% 0.7 76.7 B 95 B 128 B 155 B 185 B 217 72.2 ― continuous expansion of data user base, which grew by Handsets 5.0 and -1.9 16.9% y-o-y to 26.7 million users R 87 R 113 R 140 R 171 R 207 4.0 5.4 Darker Darker accessories G 6 G 81 G 115 G 153 G 199 Wireline 4.7 ― attractive tariff option offerings, higher usage of LTE, and 50% 25% B 140 B 161 B 180 B 201 B 227 increasing popularity of heavier data-consuming products

8.9

VAS (1) 8.8 ― stimulation of sales of data-enabled devices through R 122 R 136 R 163 R 192 R 222 Darker Darker controlled retail channels, the share of data-enabled G 181 G 138 G 165 G 194 G 223 50% 25% Data 11.6 16.2 devices(3) on MegaFon network reached 36.7% B 0 B 140 B 168 B 196 B 224 ― Scartel acquisition in Q4 2013 ― VAS revenue was stable at the level of Q2 2013 despite regulatory changes introducing “advice on charge” (subscriber

approval for any paid content and subscription-based

Financial and OperatingOperatingandandResultsResultsFinancialFinancial products) Corporate Highlights Financialand

(2) ― Voice revenue decreased by 4.4% y-o-y mostly due to Voice 43.1 41.2 migration of subscribers to bundled tariffs and price

Wireless revenue + 4.3 % competition ― Wireline service revenues increased by 15.3% y-o-y largely due to expansion of our B2G and B2B client base and deployment

+39.9% +0.5% -4.4 % +15.3% +24.6%

of our DREAM project (Diverse Route for European and Asian (1) Revenue Data VAS Voice(2) Wireline Handsets and Revenue Markets) Q2 2013 services accessories Q2 2014 • Sales of handsets and accessories grew by 24.6% y-o-y, largely y-o-y growth

driven by stimulation of equipment sales through MegaFon retail Appendix Outlook for2014 network and increased sales of Apple products Outlook for2014 Due to rounding, manual calculations for financials and KPIs may differ from those displayed. Note: (1) — Whereas previously MegaFon broke out SMS and other Value Added Service (“VAS”) statistics separately, in order to be comparable with its peers, MegaFon will henceforth combine SMS and other VAS under the 16 single heading “VAS” (2) — Voice includes revenues from local subscribers which includes monthly fees, airtime revenues, own subscriber roaming and connection fees; wireless interconnection revenues; roaming charges to other wireless operators and other wireless revenues (3) — Include smartphones, tablets, dongles and routers, and other data-enabled devices

Drivers of Russia total wireless services revenues: Results provided on this page cover

Wireless subscribers only the Russian business

(m) Total Russia wireless subscribers Growth including data service users

▲6.1 % What MegaFon?is R 0 R 0 R 100 R 154 R 203 • Overall subscriber base in Russia increased by Darker Darker

G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand Growth Corporate Highlights Financialand 50% 25% 6.1% y-o-y to 68.0 million subscribers driven by B 95 B 128 B 155 B 185 B 217 ▲16.7 % continued focus on enhancement of customer 68.1 67.6 68.0 R 87 R 113 R 140 R 171 R 207 66.3 satisfaction and loyalty and active marketing Darker Darker 64.1 G 6 G 81 G 115 G 153 G 199 50% 25%

efforts aimed at acquiring new subscribers B 140 B 161 B 180 B 201 B 227

― In Q2 2014, MegaFon retained the highest 25.2 26.1 R 122 R 136 R 163 R 192 R 222 23.2 26.0 Darker Darker 22.4 customer satisfaction index and the highest G 181 G 138 G 165 G 194 G 223 50% 25% net promoter score among Big 3 in Russia(3) B 0 B 140 B 168 B 196 B 224 • Data service user base grew by 16.7% y-o-y and accounted for 38.4% of the overall

subscriber base, which was up 3.5p.p. compared

Financial and OperatingOperatingandandResultsResultsFinancialFinancial

to Q2 2013 Corporate Highlights Financialand • Increase in data service users y-o-y was fueled by organic growth through marketing campaigns, growing share of data-enabled devices sales on MegaFon network, and Scartel

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 acquisition in Q4 2013

Data service user base (1) User base not using data service (2)

Appendix

OutlookOutlook forfor2014 2014

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed 17 (1) — Data Service User is defined as a Subscriber who has used any of our data transfer services within the preceding three months (2) — Active subscribers that do not fall within the definition of Data Service User Base (3) — According to the research conducted for Q2 2014 by independent agency Ipsos

Drivers of Russia total wireless services revenues: Results provided on this page cover

MOU and APPM only the Russian business

Blended MOU (1) & Blended APPM (2) Wireless revenue operating statistics Lower Lower

▼ 5.6 % ▼ 5.2 % • While overall voice traffic grew by 2.7% y- What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker

360 349 346 349 o-y in Q2 2014, blended MOU decreased G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 340 Corporate Highlights Financialand 50% 25% 324 331 by 5.6% y-o-y largely due to faster growth B 95 B 128 B 155 B 185 B 217 in the number of “pure”(4) data users 0.98 R 87 R 113 R 140 R 171 R 207 0.97 0.97 0.95 0.95 Darker Darker 0.93 0.92 (including Scartel users) G 6 G 81 G 115 G 153 G 199 50% 25%

B 140 B 161 B 180 B 201 B 227

• Blended APPM increased by 2.2% y-o-y R 122 R 136 R 163 R 192 R 222 due to our continued effort to promote Darker Darker Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014 G 181 G 138 G 165 G 194 G 223 50% 25% special bundled tariffs B 0 B 140 B 168 B 196 B 224 MOU, minutes per month APPM, RUB • Blended ARPU declined by 3.3% y-o-y Blended ARPU (3) largely due to the increase in our “pure” RUB per Lower Lower data service user base, price competition month ▼

▼ 1.9 % Financial and OperatingandResultsFinancial 3.3 % OperatingandResultsFinancial

in bundled tariffs and slowed-down VAS Corporate Highlights Financialand 343 337 322

333 313 322 316 revenue

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

Quarterly data Half-year data

Appendix Outlook for2014 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed Outlook for2014 (1) — Total number of minutes charged per the tariff plan of a subscriber (including both outgoing and incoming calls) in a given period divided by average number of subscribers in such period, divided by number of months in such period. The methodology for MOU calculation has been changed, as announced in the Q2 2014 Earnings release; 18 (2) — ARPU for a given period divided by MOU in such period; (3) — Total wireless services revenues (including interconnection and roaming charges but excluding connection revenues) for a given period divided by average number of wireless subscribers in such period, divided by number of months in such period (4) — Subscribers who only use data services

Drivers of Russia total wireless services revenues: Results provided on this page cover

DSU and APPMb only the Russian business

Data revenue operating statistics DSU(1) & APPMB(2) • Acquisition of Scartel in Q4 2013 has affected Growth Growth ▲94.5 % dynamics in all data-related KPIs due to ▲93.6% What MegaFon?is higher data usage by Scartel subscribers R 0 R 0 R 100 R 154 R 203 2,458 Darker Darker

2,489 2,428 G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 2,342 Corporate Highlights Financialand 50% 25% • DSU increased by 93.6% y-o-y in Q2 2014 due B 95 B 128 B 155 B 185 B 217 1,264 to active 4G/LTE rollout and promotion of 1,254 1,346 R 87 R 113 R 140 R 171 R 207 attractive tariffs for this technology, as well Darker Darker G 6 G 81 G 115 G 153 G 199 0.14 0.13 0.13 50% 25%

0.09 0.08 0.08 0.08 as growing share of data-enabled devices on B 140 B 161 B 180 B 201 B 227

MegaFon network in Q2 2014 R 122 R 136 R 163 R 192 R 222 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014 Darker Darker – (4) G 181 G 138 G 165 G 194 G 223 Organic DSU also demonstrated strong 50% 25% DSU, Mb/month APPMb, RUB growth of c.40% y-o-y on the back of B 0 B 140 B 168 B 196 B 224 DATA ARPU (ARPDU(3)) active data usage stimulation RUB per Growth Growth • APPMb decreased by 0.06 RUB/Mb/month y- month ▲20.0% ▲

23.4 % o-y largely due to the impact of Scartel

Financial and OperatingOperatingandandResultsResultsFinancialFinancial

206 Corporate Highlights Financialand 201 207 204 subscribers using large volume data bundles, 181 while organic(4) APPMb decreased by 0.03 170 167 RUB/Mb/month y-o-y • ARPDU increased by 20.0% y-o-y due to

growth of the data user base and data usage

offsetting decrease in APPMb

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

Quarterly data Half-year data

Appendix Outlook for2014 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed Outlook for2014 (1) — Total number of megabytes transferred during a given period divided by average number of data subscribers during such period, divided by number of months in such period; 19 (2) — ARPDU for a given period divided by DSU in such period; (3) — Total data revenues in a given period divided by average number of data service subscribers during such period, divided by number of months in such period (4) — DSU and APPMb attributable to subscribers excluding Scartel subscribers

Key factors influencing OIBDA margin

Key drivers of OIBDA margin

Key components • In Q2 2014, OIBDA was stable y-o-y, while OIBDA OIBDA Gross profit margin S&M margin G&A margin margin contracted by 2.8 p.p. What MegaFon?is margin R 0 R 0 R 100 R 154 R 203 47.5% ▼1.1p.p. ▲0.6 p.p ▼2.3 p.p. 44.7% ▼2.8p.p. Darker Darker

(%) G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand • Gross profit increased by 4.6% y-o-y, while gross Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 profit margin decreased by 1.1 p.p. down to 74.4% 4.5 OIBDA 0.2 largely due to: R 87 R 113 R 140 R 171 R 207 Darker Darker (RUB Bn) G 6 G 81 G 115 G 153 G 199 34.3 34.3 50% 25% -1.9 – growing share of lower margin sales of B 140 B 161 B 180 B 201 B 227

-2.8

handsets and accessories and wireline service R 122 R 136 R 163 R 192 R 222 Darker Darker revenue G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224 – reduced share of higher margin services in VAS segment • OIBDA margin was also impacted by increased

▲ Financial and OperatingandResultsFinancial

4.6% general and administrative expenses driven by OperatingandResultsFinancial Corporate Highlights Financialand growth in rent and utilities, radio frequency fees, primarily resulting from Scartel consolidation in

+6.1% +10.9% -5.9% +17.1% Q4 2013

OIBDA Revenue Cost of revenue Sales and General & OIBDA

Q2 2013 marketing Administrative Q2 2014

y-o-y growth

Appendix

OutlookOutlook forfor2014 2014

20 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed.

Consolidated CAPEX

CAPEX and CAPEX margin(1) RUB Bn

Growth Growth • In Q2 2014, CAPEX was at RUB 13.4Bn What MegaFon?is R 0 R 0 R 100 R 154 R 203 ▲ 60.6 % ▲ 75.0 % Darker Darker

G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand – We have continued investing in Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 23.9 rollout of our 4G network and 21.7 R 87 R 113 R 140 R 171 R 207 modernization of our 2G and 3G Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

networks, as we continuously B 140 B 161 B 180 B 201 B 227

endeavour to improve the quality of R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 our services 50% 25% B 0 B 140 B 168 B 196 B 224 13.4 – During H1 2014, the number of 4G 12.4 stations have increased by 44%

10.9

Financial and OperatingOperatingandandResultsResultsFinancialFinancial

8.3 8.4 Corporate Highlights Financialand 29.9%

17.5% 14.4%

11.6% 14.0% 11.2% 8.9%

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 H1 2013 H1 2014

Quarterly data Half-year data % of Revenue Appendix

OutlookOutlook forfor2014 2014

21 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (1) — MegaFon CAPEX refers to actual CAPEX accrued for the year and may not match cash flow CAPEX.

Consolidated balance sheet and leverage

Balance sheet As of 31 Dec 2013 As of 30 June 2014 • Strong operational cash flow allowed us to Cash and cash equivalents 9.9 47.0 prepay Scartel liability while maintaining a

comfortable level of leverage What MegaFon?is Short-term investments 37.9 3.0 R 0 R 0 R 100 R 154 R 203 Darker Darker

- 90% of the total consideration for Scartel G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand Corporate Highlights Financialand 50% 25% Total debt 151.0 168.8 was prepaid in June using new RUB funding B 95 B 128 B 155 B 185 B 217 Long-term debt 131.7 132.0 and available cash deposits, reducing R 87 R 113 R 140 R 171 R 207 foreign exchange risk exposure Darker Darker Short-term debt 20.5 37.8 G 6 G 81 G 115 G 153 G 199 50% 25% - Net debt/LTM OIBDA was at 0.90x level by B 140 B 161 B 180 B 201 B 227

Deferred financial cost (1.0) (1.0)

the end of Q2 2014 (1) R 122 R 136 R 163 R 192 R 222 Net debt 103.2 118.8 Darker Darker • Satisfactory liquidity position enabled payment G 181 G 138 G 165 G 194 G 223 50% 25% Shareholders’ equity (2) 138.3 121.8 of FY 2013 final dividend B 0 B 140 B 168 B 196 B 224 Total assets 430.6 429.4 • Euroset liability was fully settled in July 2014 with treasury shares, further de-risking MegaFon’s foreign exchange position and Net debt(1) and Net debt/LTM OIBDA

generating savings on future interest payments

Financial and OperatingOperatingandandResultsResultsFinancialFinancial RUB Bn / (x) Growth Corporate Highlights Financialand

+ 0.31x

0.90 0.78 0.68 0.69 LT credit rating: 0.59 - local currency Baa3 ruAAA 103.2 118.8 - foreign currency Baa3 BBB-

76.7 90.8 91.4

Outlook Stable ▲ Stable ▲

Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Last change 03.07.2014 15.08.2014

Net debt Net debt/LTM OIBDA Appendix

OutlookOutlook forfor2014 2014

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed 22 (1) — Net debt is calculated as the difference between (a) principal amount of loans and borrowings less unamortized debt issuance fees and (b) cash, cash equivalents, and principal amount of deposits. (2) — Including non-controlling interests.

Debt profile

Debt portfolio structure

(1) (2) • Well-balanced debt portfolio with What MegaFon?is By instrument By currency By maturity R 0 R 0 R 100 R 154 R 203 optimized currency split to minimize Darker Darker

G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand Corporate Highlights Financialand 50% 25% % OF TOTAL foreign exchange exposure B 95 B 128 B 155 B 185 B 217 3% 14% - Increased RUB funding through R 87 R 113 R 140 R 171 R 207 19% 17% Darker Darker G 6 G 81 G 115 G 153 G 199 placement of RUB 15Bn exchange 50% 25%

41% 13% B 140 B 161 B 180 B 201 B 227

2014 -

bonds in May 2014

51%

Mar 7%

- R 122 R 136 R 163 R 192 R 222 30% Darker Darker 31 G 181 G 138 G 165 G 194 G 223 80% 50% 25%

25% B 0 B 140 B 168 B 196 B 224 Financial and OperatingandResultsFinancial

2% OperatingandResultsFinancial

Corporate Highlights Financialand

14% 22%

27% 28% 2014

- 48% Jun

- 16% 30 25%

84% 28% 6%

Bank Loans RUB 1 Year 2 Years

Equipment Financing USD 3 Years 4 Years Appendix Outlook for2014 Bonds EUR 5 Years and Longer Outlook for2014

23 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (1) – Debt portfolio currency split post cross-currency hedges; (2) – Debt portfolio doe s not factor Scartel and Euroset liabilities

Outlook for 2014

What What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker

Revenue growth 6.0-8.0% growth y-o-y Reiterate G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217

R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker OIBDA margin ≥44.0% Reiterate G 181 G 138 G 165 G 194 G 223 50% 25%

B 0 B 140 B 168 B 196 B 224

Financial and OperatingOperatingandandResultsResultsFinancialFinancial Expected capital expenditures Corporate Highlights Financialand CAPEX Reiterate

in the range of RUB 58-64Bn

Appendix

OutlookOutlook forfor2014 2014

24 R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% 3 B 95 B 128 B 155 B 185 B 217 R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

Appendix 25

MegaFon employs the best-in-class Corporate Governance practices…

Corporate governance Board of Directors composition . Existing MegaFon Corporate Governance structure complies with all requirements of the London and Moscow stock exchanges where MegaFon Nominated by USM Nominated by Independent Teliasonera directors What MegaFon?is trades R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 . Board of Directors reelected in Mar-2014 consists of 7 members: 50% 25% B 95 B 128 B 155 B 185 B 217 4 Board members represent interests of minority shareholders: 2 R 87 R 113 R 140 R 171 R 207 TeliaSonera representatives and 2 INEDs Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% 3 representatives of controlling shareholder USM B 140 B 161 B 180 B 201 B 227

Sergey Soldatenkov Carl Peter Christian Luiga Jan Rudberg

. Three Committees of the Board of Directors have been set up for Chairman of the Board R 122 R 136 R 163 R 192 R 222 improving corporate governance standards: Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25%

Audit Committee B 0 B 140 B 168 B 196 B 224

Remuneration and HR Development Committee Appendix Finance and Strategy Committee . On 12 Nov 2013, MegaFon’s Board of Directors approved the Code of Vladimir Streshinsky Berndt Kenneth Karlberg Lord Myners

Business Conduct and Ethics further streamlining the corporate Corporate Highlights Financialand governance procedures in the Company . Following the listing reform on the Moscow Exchange, in June 2014, the Company’s shares were upgraded to the “Highest” quotation list QL I, thus allowing pension funds and state corporations to invest in The majority of the Board MegaFon’s stock Sergey Kulikov represents minority shareholders - This upgrade confirms MegaFon compliance with MOEX’s highest

corporate standards Appendix

26

…led by a management team with extensive TMT experience

Ivan Tavrin, Chief Executive Officer ● Appointed Chief Executive Officer of MegaFon in Apr 2012

● Previously, Deputy CEO and member of the Management Board since Mar 2012 What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker ● Extensive experience in the Russian media industry, pioneering its development over the past 16 years, including Regional Media Group, Media One G 152 G 179 G 194 G 212 G 232 50% 25% Holding, Vyberi Radio Group and TV-3 B 95 B 128 B 155 B 185 B 217 ● Board positions outside MegaFon include MO-TV Holdings Limited, UTH Russia Limited, Media-One Holdings Limited and CJSC Kommersant R 87 R 113 R 140 R 171 R 207 Publishing House. Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

B 140 B 161 B 180 B 201 B 227

Mikhail Dubin, Executive Director, Consumer Business Gevork Vermishyan, Chief Financial Officer R 122 R 136 R 163 R 192 R 222 Darker Darker ● Deputy CEO for Strategic Development since Jul 2010 ● CFO since Jul 2011 G 181 G 138 G 165 G 194 G 223 50% 25%

● Previously Deputy CEO of Telecominvest ● Previously Director of Corporate Finance at AFK Sistema B 0 B 140 B 168 B 196 B 224 ● Previously Head of Telecom Project Finance Group at ● 12 years of finance / 7 years of TMT experience

Sberbank Appendix

● 14 years of TMT experience Corporate Highlights Financialand Dmitry Kononov, Director, Investors Relations and M&A Alexander Bashmakov, Director, Strategy ● Director for Business Development, M&A, IR since Dec 2008 ● Strategy Director since Mar 2012 and Chief Procurement ● Joined MegaFon in 2000. Served as the company’s CFO in Officer since early 2013 2002-2004 ● Previously core member of BCG CIS telecom practice ● 21 years of TMT experience ● 7 years in management consulting with focus on Telecom

& IT (Accenture and BCG)

Appendix

27 Technological neutrality introduced in the end of 2013 will boost

competition but will allow MF to cement its leadership in mobile data

MegaFon has noticeable advantage in terms of frequencies… … allowing to get significantly higher data transfer rate in MegaFon’s network

. Both operator and end-user equipment already support 2x20 MHz for What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker LTE, no other operator beside MegaFon can provide such band G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217 800 MHz (LTE) 2x7,5 2x7,5 2x7,5 2x7,5 length

R 87 R 113 R 140 R 171 R 207 . After implementation of technology neutrality MegaFon is the only Darker Darker 2x0,8- 2x2,2- 2x0,6- G 6 G 81 G 115 G 153 G 199 900 MHz (2G(2)) 2x5-2x15,2(1) operator able to utilize 3 times 2x20 MHz channels (2x20 MHz in 50% 25% 2x13,6(1) 2x13,2(1) 2x8,4(1) B 140 B 161 B 180 B 201 B 227

1800 band and 2 times 2x20 in 2600 band) for LTE

2x14,6- 2x12- (1) (1) R 122 R 136 R 163 R 192 R 222 1 800 MHz (2G) (1) (1) 2x14,2-2x29,4 2x5,2-2x29,8 Darker Darker 2x29,8 2x29,8 . In other technologies all nation-wide operators are almost equal G 181 G 138 G 165 G 194 G 223 50% 25%

B 0 B 140 B 168 B 196 B 224 . None of nation-wide operators except MegaFon can realize

2x15 2x15 2x15 2x15 significant benefits from implementing technological neutrality

2 100 MHz (3G) Appendix Corporate Highlights Financialand 2 600 MHz (LTE) 2x40 2x10 2x10 2x10

Wider band means higher data transfer

rate and higher capacity of the network

Appendix

28 (1) Depending on Russian region (2) 3G only for Moscow, Moscow region and Komsomolsk-on-Amur

Telecom companies are more resilient to economic shocks

Using more fundamental approach, It is commonly accepted that mobile market In that approach, we see two drawbacks, macroeconomic risk turned out to be less for

growth rate depends on GDP growth which we tried to eliminate the two reasons What What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker That is supported by regular correlation analysis 1 Correlation coefficient became lower G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217 Problem Solution Beta(1) ≈ 0,6 Mobile communication market R 87 R 113 R 140 R 171 R 207 (national currency)’05-’12 CAGR Darker Darker G 6 G 81 G 115 G 153 G 199 2 Consumption is less volatile than GDP 50% 25% GDP does not define B 140 B 161 B 180 B 201 B 227

Consumption is 30% 1 communication used instead of GDP Growth rate Each point is an R 122 R 136 R 163 R 192 R 222 services usage Darker Darker independent country G 181 G 138 G 165 G 194 G 223 30% 50% 25%

20% B 0 B 140 B 168 B 196 B 224 +6% 20% 10% Appendix A lot of factors that Such factors as 10% can lead to strong market maturity, FX 0% 2 Corporate Highlights Financialand Beta(1) ≈ 0,9 correlation are not rate, world trends -5% considered are controlled(2) 0%

-10% -10% -11% -10% 0% 10% 20% 30% 2007 2008 2009 2010 2011 2012 2013 Nominal GDP (national currency) ’05-’12 CAGR Russian nominal GDP (in RUB)

Russian nominal consumption (in RUB)

Note: Covered countries- ARG, AUT, BEL, BRA, CAN, CHL, CHN, COL, DNK, EGY, FIN, FRA, DEU, GRC, IND, ISR, ITA, JPN, MEX, NLD, NOR, PER, PRT, RUS, ZAF, SWE, CHE, TUR Appendix (1) Beta – correlation coefficient that shows how market growth rate depends on macroeconomic factors (e.g. GDP or disposable income); (2) Controlling parameters: subscriber base growth rate, broadband internet access penetration, FX rates, time parameters, random effects for each country Source: IE Market Research, World Bank, FSSS, Merrill Lynch Wireless Matrix, MegaFon Strategy analysis 29

MegaFon headline tariffs (Moscow region)

Tariff name Price Features Beyond the package • 400 minutes MegaFon - • On MegaFon subs of Moscow region – 0 RUB/min All included S 150 RUB/ Month • 1 Gb of 3G, 4G+ traffic

Tariffs for • 100 SMS/MMS • Other MegaFon subs – 6.5 RUB/min What What MegaFon?is smartphones R 0 R 0 R 100 R 154 R 203 • 600 minutes Darker Darker • On MegaFon subs of Moscow region – 0 G 152 G 179 G 194 G 212 G 232 MegaFon - • 3 Gb of 3G, 4G+ traffic RUB/min 50% 25% 590 RUB/ Month B 95 B 128 B 155 B 185 B 217 All included M • 600 SMS/MMS • Other MegaFon subs – 2.9 RUB/min • Intercity calls — 2.90 rub/min R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 • 1,800 minutes in Russia 50% 25% • On MegaFon subs of Moscow region – 0 B 140 B 161 B 180 B 201 B 227 MegaFon - • 8 Gb of 3G, 4G+ traffic RUB/min 1,290 RUB/ Month All included L • 1,800 SMS/MMS • All outgoing calls to other regions of Russia – R 122 R 136 R 163 R 192 R 222 2.9 RUB/min Darker Darker • Special terms for trips in Russia G 181 G 138 G 165 G 194 G 223 50% 25% Tariffs for B 0 B 140 B 168 B 196 B 224 MegaFon - 150 RUB/ Month • 3 Gb of traffic

data-only devices Internet S • Maximum speed is not limited Appendix • Once a plan data allowance is used, the MegaFon - • 7 Gb of traffic Internet access will automatically be suspended until the next calendar month or Internet M 590 RUB/ Month • Maximum speed is not limited until the plan is upgraded with other Corporate Highlights Financialand options

MegaFon - 890 RUB/ Month • 15 Gb of traffic Internet L • Maximum speed is not limited

• Outgoing call of subs of Moscow st region – 1.6 RUB/1 min, 0 RUB from st Switch to zero 0 RUB/ Month 2nd min • Starting from 121 minute – 1.5 RUB/min Most popular • 9.9 RUB/Mb

tariffs • Outgoing call of subs of Moscow Appendix Everything is simple 0 RUB/ Month region – 1.6 RUB/min • Not applicable • 9.9 RUB/Mb

30

The most popular tariff in Russia is “Switch to Zero”

Contact Information MegaFon Investor Relations 30 Kadashevskaya embankment R 0 R 0 R 100 R 154 R 203 Darker Darker Moscow, 115035, Russia G 152 G 179 G 194 G 212 G 232 50% 25% Tel.: +7 495 926 2012 B 95 B 128 B 155 B 185 B 217 Email: IR@.ru R 87 R 113 R 140 R 171 R 207 Darker Darker Web: ir.megafon.com G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

31