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

October 2015

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

MegaFon About R 0 R 0 R 100 R 154 R 203 1. About 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 1H 2015 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

About MegaFon 4

MegaFon – investment summary

Highlights Consolidated 1H 2015 revenue breakdown MegaFon

Strong • 2nd largest Russian mobile operator(1), with 71.4 MM subscribers(2) and RUB 150.1 Bn About fundamentals historically growing market share R 0 R 0 R 100 R 154 R 203 >98% of revenues comes from Darker Darker 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; • R 87 R 113 R 140 R 171 R 207 Unrivalled frequency spectrum and accessories; 87.2% Darker Darker G 6 G 81 G 115 G 153 G 199 5.6% 50% 25%

• Leading /LTE operator providing access to 4G/LTE network in 74 B 140 B 161 B 180 B 201 B 227

Russian regions to c.53.0%(3) of population by the end of Q2 2015 R 122 R 136 R 163 R 192 R 222 Wireline revenues; Darker Darker G 181 G 138 G 165 G 194 G 223 • 7.2% 50% 25% Innovative player with a customer-centric approach and a leading position B 0 B 140 B 168 B 196 B 224 in digital services and content

• Extensive retail network consisting of over 8,000 stores, including 2,066 owned-and-operated stores, approx. 2,000 third-party monobrand stores and 4,000 Euroset stores Compelling historical financial performance

RUB Bn 2010 2011 2012 2013 2014 CAGR 1H 2015 Corporate Highlights Financialand • Managed by a professional team with solid track record Total mobile subscribers (MM) 57.2 62.8 64.6 70.1 72.2 6.0% 73.8 • Listed on the London and stock exchanges since 27 Nov 2012 Consolidated revenue 215.3 242.4 272.3 297.2 314.8 10.0% 150.1 • Superior historical growth among Big 3 Russian mobile operators with Growth Consolidated OIBDA 97.6 100.6 117.1 132.6 138.5 9.1% 66.7 solid future growth potential Margin (%) 45.3% 41.5% 43.0% 44.6% 44.0% 44.4%

• Focus on improving operating efficiency and capital expenditure Capex (66.5) (70.6) (45.2) (47.1) (56.5) -4.0% (20.6) Returns management which translates into growing cash flows As % of revenues 30.9% 29.1% 16.6% 15.9% 17.9% 13.7% OIBDA−Capex 31.1 30.0 71.9 85.4 82.0 27.4% 46.1 • Highly attractive shareholder remuneration policy: at least 50% of net Appendix income, or 70% of free cash flow As % of revenues 14.4% 12.4% 26.4% 28.7% 26.1% 30.7%

Source: Company data. 5 Note: (1) – By overall mobile revenue and number of subscribers as of the end of Q2 2015 in Russia (2) – Total number of subscribers as of the end of Q2 2015 was 73.8MM in Russia, , South Ossetia and Abkhazia (3) – Russian population as of the latest census in October 2010

20 years of our success story to become a leading telecom operator in Russia

MegaFon total revenues (RUB Bn) Leading 4G

Acquisition of 100% provider in Russia MegaFon What What MegaFon?is stake in /Scartel

Launch of 4G/LTE General About services in partnership recommended for Communication What MegaFon?is shareholder vote R 0 R 0 R 100 R 154 R 203 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. 314,8 cover all Peters- 297.2

Launch of online regions in burg Corporate Highlights Financialand 272.3 Corporate Highlights Financialand store and Russia 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

Appendix

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

Resilient Russian telecom play

Reputable analysts are optimistic about MegaFon’s performance (1)

and see upside to guidance recovers Share price performance since January 2014

MegaFon What What MegaFon?is

35,00 About Progressing well. In need of strong 2H top-line growth. Hold What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker

G 152 G 179 G 194 G 212 G 232 50% 25% … Our four takeaways from the quarterly results: (1) MegaFon was B 95 B 128 B 155 B 185 B 217 impacted by the macro environment in Russia, albeit to at a lesser 25,00 R 87 R 113 R 140 R 171 R 207 extent than expected. (2) Telcos are more sensitive to private Darker Darker -48% G 6 G 81 G 115 G 153 G 199 consumption trends than in the past, but we believe Q2 marked the 50% 25% B 140 B 161 B 180 B 201 B 227

15,00 -64%

bottom and Russia reaching macro equilibrium should work in MFON's favour in the coming quarters. Thus, we see upside to -65% R 122 R 136 R 163 R 192 R 222 -68% Darker Darker guidance. G 181 G 138 G 165 G 194 G 223 50% 25% Bank of America Merrill Lynch, August 2015 B 0 B 140 B 168 B 196 B 224

5,00 Corporate Highlights Financialand

Strong FCF generation in 2Q15; Expect a healthy dividend

payout before year-end. Buy Corporate Highlights Financialand MSCI Russia Corporate Highlights Financialand

The operator positively surprised with lower capex/higher FCF generation. The operator positively surprised on the earnings

side…. FY15 guidance remained unchanged and now looks very OperatingandResultsFinancial conservative. We see upside risk to FY15 FCF BBG estimates and

expect at least a 7% dividend yield in interim payout in 4Q15.

J.P.Morgan, August 2015

Appendix Appendix Outlook for2014 7 Source: Analysts reports, Bloomberg Notes: (1) — Share prices indexed to MegaFon LSE share price Russian market preserves attractiveness despite turbulent

macroeconomic environment

Competitive telecom market dynamics MegaFon track record of gaining market share

MegaFon What What MegaFon?is • 3 nationwide mobile operators

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

∆ 2Q15/ G 152 G 179 G 194 G 212 G 232 • Relatively high OIBDA margin (compared to developed markets) 219 228 230 237 240 238 242 50% 25% 1Q15 B 95 B 128 B 155 B 185 B 217 on the back of relatively benign competition and regulatory framework R 87 R 113 R 140 R 171 R 207 32,6% Darker Darker 30,7% 30,9% 31,0% 31,3% 31,1% G 6 G 81 G 115 G 153 G 199 29,3% -0.2 pp 50% 25% Benign regulatory framework B 140 B 161 B 180 B 201 B 227

27,1%

23,7% 27,1% 29,0% 29,5% +0.3 pp • Mobile termination rates, rates, and last mile fiber 28,8% 29,2% +0.2 pp R 122 R 136 R 163 R 192 R 222 (1) 25,8% 25,1% 24,3% 23,9% 23,8% 23,4% Darker Darker access are not regulated 23,6% G 181 G 138 G 165 G 194 G 223 50% 25% Others 17,8% 17,1% 17,6% 18,1% -0.4 pp B 0 B 140 B 168 B 196 B 224 • Mobile number portability implemented relatively late in terms 16,0% 16,2% 15,8% Corporate Highlights Financialand (2) of market development . In 2014, MegaFon was the main 2010 2011 2012 2013 2014 1Q15 2Q15 beneficiary of this process with 35% of total numbers ported in. • Local loop unbundling is not implemented

Big 3 mobile revenues 2Q 2015 Big 3 data revenues 2Q 2015

Corporate Highlights Financialand Corporate Highlights Financialand Russian market fundamentals +0.1 p.p. +1.2 p.p. 34,0% 39,4% East-Central Russia G7(4) Europe(3)

GDP (CAGR 2014-2016E real change p.a.) -1.5% 2.9% 1.8% OperatingandResultsFinancial 28,4% 21,8% Private consumption (CAGR 2014-2016E 37,6% -2.9% 2.4% 1.6% 38,8%

real change p.a.) -0.4 p.p. -0.7 p.p.

+0.3 p.p. -0.5 p.p.

Appendix Source: EIU (as of March 1, 2015) Appendix Note: QoQ change in Big 3 share (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

Network infrastructure development

Growth

▲ 19.5% • In 2014, MegaFon remained focused on increasing the quality of MegaFon

connections. By the year-end, the key indicators improved

About What What MegaFon?is 18 636 R 0 R 0 R 100 R 154 R 203 Darker Darker 10 106 • The improvement in quality of services was achieved due to further roll- G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% 38 151 out and modernisation of 4G/3G/ networks in Russia B 95 B 128 B 155 B 185 B 217 Number of base 33 298 stations R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

46 341 4G base stations + 84% y-o-y B 140 B 161 B 180 B 201 B 227

42 929 3G base stations + 15% y-o-y R 122 R 136 R 163 R 192 R 222 Darker Darker 2G base stations + 8% y-o-y G 181 G 138 G 165 G 194 G 223 2013 2014 50% 25% B 0 B 140 B 168 B 196 B 224 2G BS, units 3G BS, units 4G BS, units Length of fiber-optic communication lines +7% y-o-y Growth

▲ 7.4% (backbone infrastructure)

Financial and OperatingandResultsFinancial Corporate Highlights Financialand 121 102 Corporate Highlights Financialand

112 783 • In 2014, MegaFon launched the Global network operational center (GNOC) 64% Backbone to improve network quality through centralization of operational and infrastructure 62% maintenance activities in one center

• The GNOC has two sites in (NOC “West”) and

(NOC “East”), each of them responsible for 4 branches

2013 2014 Appendix Backbone Share of BS interconnected Appendix FOCL(1), km via FOCL, % Outlook for2014

9 Note: (1) FOCL – fiber-optic communication lines (2) OSS – Operation support system

4G development in Q2 2015 – focus on quality

4G/LTE network development MegaFon • Number of 4G base stations increased by 9% y-o-y in 1H 2015 About R 0 R 0 R 100 R 154 R 203 Darker Darker • 4G availability: G 152 G 179 G 194 G 212 G 232 Saint- Corporate Highlights Financialand 50% 25% Petersburg – 74 federal regions B 95 B 128 B 155 B 185 B 217

R 87 R 113 R 140 R 171 R 207 – 530 cities and towns Darker Darker G 6 G 81 G 115 G 153 G 199 Moscow 50% 25%

– 14 out of 15 cities with a population(1) over 1 mln people B 140 B 161 B 180 B 201 B 227

R 122 R 136 R 163 R 192 R 222 Rostov-on-Don 4G/LTE services Darker Darker G 181 G 138 G 165 G 194 G 223 Chelyabinsk 50% 25% • LTE-Advanced services providing speeds of 150-300 B 0 B 140 B 168 B 196 B 224 Chita Mbit/sec are available in 5 cities

• 4G-enabled devices registered on MegaFon network - 6.5 Federal districts covered by MegaFon 4G / LTE network million units (+42% y-o-y)

Cities where LTE-Advanced available OperatingandResultsFinancial Corporate Highlights Financialand • 4G traffic usage increased by 39% y-o-y

Availability of MegaFon 4G services • Share of 4G traffic in total data traffic – 40%

68 72 74 74 LTE-roaming 58 • MegaFon is one of the world’s leaders in LTE-roaming coverage in terms of countries covered 50% 51% 52% 53% 41% • In Q2 2015, LTE-roaming coverage extended to 52 countries

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 with 54 operators Appendix Outlook for 2015 Number of Russia’s regions, where % of population covered MegaFon 4G is available

10 Note: (1) — Russian population as of the latest census in October 2010

Strong position in distribution in 1H 2015

Structure of MegaFon distribution network Key points MegaFon

Controlled retail 69% gross additions* • Through its controlled and non-controlled retail About R 0 R 0 R 100 R 154 R 203 network, MegaFon holds the leading position in Darker Darker G 152 G 179 G 194 G 212 G 232 distribution in Russia Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 • The current structure of the distribution network R 87 R 113 R 140 R 171 R 207 Darker Darker enables MegaFon to steadily increase its subscriber G 6 G 81 G 115 G 153 G 199 50% 25%

and data user base and improve the quality of gross B 140 B 161 B 180 B 201 B 227

additions MegaFon Retail, Franchised stores under Euroset R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 incl. online store MegaFon brand (50% interest) • New dealer agreement with Svyaznoy effective 1 50% 25% B 0 B 140 B 168 B 196 B 224 April 2015 is based on a revenue sharing principle 2,066 stores ~ 2,000 stores ~ 4,000 stores and provides MegaFon with access to an attractive base of potential subscribers •

In 1H 2015, MegaFon’s controlled retail network OperatingandResultsFinancial Non-controlled retail 31% gross additions* maintained a positive gross margin, despite the Corporate Highlights Financialand downward trend in per-device margin due to shift to cheaper and more affordable models amid weaker Independent dealers: consumer purchasing power • In Q2 2015, sales of and tablets in

Multi-brand electronic stores Federal retail chain MegaFon Retail increased by 4% y-o-y, and share of Russian Post outlets (dealer agreement) 4G devices grew to 8% of total sales (+3 p.p. y-o-y) Local dealers Other ~ 3,000 stores Appendix Outlook for 2015

11 Note: (*) for the quarter, as of end of Q2 2015

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

Total Russia wireless subscribers, MM Consolidated Revenue breakdown, RUB Bn MegaFon Growth Lower What MegaFon?is ▲ 5.0%

314,8 ▼ 0.9% About 68,1 69,7 68,0 71,4 297,2 What MegaFon?is 62,6 272,3 23,1 151.5 150.1 R 0 R 0 R 100 R 154 R 203 18,1 22,2 9,8 8,4 Darker Darker

G 152 G 179 G 194 G 212 G 232 21,0 25,2 27,7 26,1 28,3 13,3 20,1 10,7 10,8 50% 25% 17,9 B 95 B 128 B 155 B 185 B 217 269,5 131, 130, 241,1 259,0 0 9 R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% 2012 2013 2014 1H 2014 1H 2015 2012 2013 2014 1H 2014 1H 2015 B 140 B 161 B 180 B 201 B 227

(1) (2)

Data service user base User base not using data service Wireless services Wireline services Equipment & Accessories R 122 R 136 R 163 R 192 R 222 Darker Darker Data ARPU (ARPDU(5)) and DSU(6) Growth Consolidated OIBDA and OIBDA margin G 181 G 138 G 165 G 194 G 223 Lower 50% 25% ▲ 27.1% ▼ 0.1% B 0 B 140 B 168 B 196 B 224 2 603 3 123 132,6 138,5 Corporate Highlights Financialand 2 458 117,1 66,8 66,7 1 586 43,0% 44,6% 44,0% 1 068 44,4 164 181 209 206 222 44,1

% %

Corporate Highlights Financialand Corporate Highlights Financialand 2012 2013 2014 1H 2014 1H 2015 2012 2013 2014 1H 2014 1H 2015

Data ARPU, RUB per month DSU, MB/month % of Revenue

(3) (4) Lower Blended ARPU and blended MOU Consolidated Capex and Capex margin ▼ 5.1% 56,5 344 344 334 21,7 OperatingandResultsFinancial 45,2 47,1 14,4 20,6 % 13,7 16,6% 15,9% 17,9%

%

319 326 321

2012 2013 2014 2012 2013 2014 1H 2014 1H 2015

Appendix Appendix ARPU, RUB per month MOU, minutes per month % of Revenue

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 Outlook for2014 (2) — Active subscribers that do not comply with the definition of Data Service User Base 12 (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 (4) — The total number of minutes charged per the tariff plan of a subscriber during a given period divided by the average number of all voice, VAS and data subscribers during such period, divided 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 MegaFon

What What MegaFon?is

About 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” Corporate Highlights Financialand 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 Appendix Outlook for2014 13 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 1H 2015 14

Key highlights: resilient OIBDA margin

Lower Lower

▼ 0.7% ▼ 0.9% MegaFon 82,2 150,1 Revenue, OIBDA and Net profit

76,7 81,1 74,0 76,1 151,5 About Revenue • In Q2 2015, total revenue declined by 0.7% y- R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 o-y due to the decrease in sales of equipment Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 and accessories (-19.6% y-o-y), while service Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 R 87 R 113 R 140 R 171 R 207 revenue increased by 0.6% y-o-y Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

Growth Lower • OIBDA increased by 1.3% y-o-y mainly due to ▲ 1.3% ▼ 0.1% R 122 R 136 R 163 R 192 R 222 a decrease in the total cost of revenues and Darker Darker 37,3 34,7 G 181 G 138 G 165 G 194 G 223 34,3 34,5 32,0 66,8 66,7 50% 25% lower general and administrative costs. As a B 0 B 140 B 168 B 196 B 224 44,4% OIBDA 44,7% 46,0% 41,9% 43,2% 45,6% 44,1% result, OIBDA margin strengthened by 0.9% p.p. and reached 45.6%

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 (1)

• Net profit decreased by 6.4% y-o-y. Net OperatingandResultsFinancial Corporate Highlights Financialand profit in Q2 2014 benefited from a significant Lower Lower ▼ 6.4% ▼ 3.4% one-time FX gain resulting from the ruble

13,9 12,8 13,0 21,1 20,4 revaluation with respect to the deferred

(1) 7,4 consideration due under the Scartel and Net profit 18,1% 15,8% 17,1% 13,9% 13,6% 2,8 10,0% Euroset transactions, which were repaid in 3,4% 2014

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 Appendix

Quarterly data, RUB Bn Half-year data, RUB Bn % of Revenue Outlook for 2015

15 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: Free Cash Flow and CAPEX

Lower Lower (1)

▼ 6.4% ▼ 5.1% CAPEX , OIBDA-CAPEX, Free Cash Flow MegaFon

20,5

21,7 About 20,6 • In Q2 2015, MegaFon invested RUB 12.5 Bn, 13,4 14,3 R 0 R 0 R 100 R 154 R 203 CAPEX 12,5 Darker Darker which is 6.4% lower than in Q2 2014. Our G 152 G 179 G 194 G 212 G 232

8,1 Corporate Highlights Financialand 17,6% 24,9% 14,4% 13,7% 50% 25% 17,5% 10,9% 16,5% CAPEX: B 95 B 128 B 155 B 185 B 217 ― represents 16.5% of our revenue R 87 R 113 R 140 R 171 R 207 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% ― is in line with our CAPEX rationalization B 140 B 161 B 180 B 201 B 227

Growth Growth

▲ 6.2% ▲ 2.3% efforts R 122 R 136 R 163 R 192 R 222 Darker Darker 46,1 ― is focused on: G 181 G 138 G 165 G 194 G 223 23,0 23,9 45,1 50% 25% 20,9 22,2 B 0 B 140 B 168 B 196 B 224 . improvement of network quality 14,0 OIBDA-CAPEX 32,3% 29,1% 29,7% 30,7% 27,2% 28,4% . increase of customer data traffic capacity 17,0%

. creation of unified billing system Financial and OperatingandResultsFinancial

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 Corporate Highlights Financialand • Due to the higher OIBDA and lower capex Growth Growth ▲ 35.3% ▲ 11.4% spending, OIBDA-CAPEX increased by 6.2% 25,5 y-o-y 27,9 31,1 17,4 19,3 14,3 31,4% 11,7 Free Cash Flow 21,1% 25,4% • Free Cash Flow increased by 35.3% y-o-y

18,6% 15,9% 18,4% 20,7%

mostly due to significant improvement in

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 cash flow from operating activities Appendix

Quarterly data, RUB Bn Half-year data, RUB Bn % of Revenue Outlook for 2015

16 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 revenue components

Mobile data revenue remains the key revenue growth driver Wireless revenue increased by 0.8% y-o-y mainly driven

Lower by increase in mobile subscriber base and data revenue, MegaFon

▼ 0.7% which offset the effects of intensified price competition, About 81.1 82.2 discontinued targeting of seasonal workers, and Handsets R 0 R 0 R 100 R 154 R 203 76.6 76.1 continued migration of subscribers to bundled tariffs Darker Darker and 6,2 7,2 74.0 G 152 G 179 G 194 G 212 G 232 accessories 5,0 4,0 ▼ 19.6% Corporate Highlights Financialand 50% 25% 5,2 6,3 4,4 • B 95 B 128 B 155 B 185 B 217 Wireline 5,4 5,3 ▼ 1.2% Mobile data continued to be the key growth driver 5,5 and represented 25.6% of total revenue in Q2 2015 R 87 R 113 R 140 R 171 R 207 Darker Darker vs. 21.1% in Q2 2014, increasing by 20.3% y-o-y due G 6 G 81 G 115 G 153 G 199 50% 25%

to B 140 B 161 B 180 B 201 B 227

Other wireless 52,4 51,2 47,4 ― expansion of data user base by 8.4% y-o-y to 50,1 46,2 R 122 R 136 R 163 R 192 R 222 revenue(1) Darker Darker 28.3 million users G 181 G 138 G 165 G 194 G 223 50% 25% ▲ 0.8% B 0 B 140 B 168 B 196 B 224 ― higher data usage resulting from active marketing efforts, attractive tariff offerings and intensive 4G network development

Data 17,4 17,5 17,9 19,5 ▲ 20.3% 16,2 ― higher adoption of data-enabled devices. The

(2) OperatingandResultsFinancial share of data-enabled devices on MegaFon Corporate Highlights Financialand Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 network is now at 49%

Wireless services 86.5% 86.0% 83.6% 86.7% 87.8% Wireline service revenues slightly decreased by 1.2% y- o-y due to our ceasing to provide lower-margin traffic - Data 21.1% 21.4% 21.3% 24.1% 25.6% transmission to B2O clients

Wireline services 7.0% 6.4% 7.7% 7.4% 7.0%

Sales of handsets and accessories decreased by 19.6%

Handsets and y-o-y as a result of reduced consumer purchasing 6.5% 7.6% 8.7% 5.9% 5.2%

accessories power, which caused a shift to lower-end devices Appendix

Due to rounding, manual calculations for financials and KPIs may differ from those displayed. Outlook for 2015 Note: (1) — Other wireless revenue includes revenues from VAS services; revenue from local subscribers which includes monthly fees, airtime revenues, own subscriber roaming and connection fees; wireless interconnection 17 revenues; roaming charges to other wireless operators and other wireless revenues (2) — 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

(MM) Total Russia wireless subscribers including

Growth MegaFon

▲ 5.0% data service users About Growth • Overall subscriber base in Russia increased by 3.4 R 0 R 0 R 100 R 154 R 203 ▲ 8.4 % Darker Darker million new subscribers (+5.0% y-o-y) to 71.4 G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 71,4 million resulting from: 68,0 69,1 69,7 69,5 - active subscriber acquisition marketing efforts R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 and new marketing campaign 50% 25% 28,3 B 140 B 161 B 180 B 201 B 227 26,1 26,8 27,7 27,3 - upgrade of existing tariffs and introduction of R 122 R 136 R 163 R 192 R 222 new services Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% - attractive tariff offerings B 0 B 140 B 168 B 196 B 224 - new dealer contract with Svyaznoy, which provides access to an attractive customer base

- customer-oriented business approach. Financial and OperatingandResultsFinancial - In Q2 2015, MegaFon attained the highest net Corporate Highlights Financialand promoter score among Big 3 in Russia(3) Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 • Data service user base expanded by 8.4% y-o-y to Data service user base (1) User base not using data service (2) 28.3 million users accounting for almost 40% of the overall subscriber base

Share of data users in overall subscriber base, % • Increase in data service users was achieved due to

38.4% 38.8% 39.7% 39.3% 39.7% organic growth through initiatives aimed at

promoting shift of “pure” voice users to data usage Appendix

and increased penetration of data-enabled devices Outlook for 2015 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed on MegaFon network (1) — Data Service User is defined as a Subscriber who has used any of our data transfer services within the preceding three months 18 (2) — Mobile subscribers that do not fall within the definition of Data Service User Base (3) — According to the research conducted in Q2 2015 by the independent agency Ipsos

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) • MegaFon Growth Growth Strong increase of DSU (+26.6% y-o-y) in Q2

▲26.6 % ▲27.1% 2015 resulted from: About 3 188 3 123 R 0 R 0 R 100 R 154 R 203 2 959 3 074 – intensive roll-out of the 4G/LTE network Darker Darker G 152 G 179 G 194 G 212 G 232 2 428 2 529 2 458 Corporate Highlights Financialand 50% 25% – upgrade of tariffs and tariff options B 95 B 128 B 155 B 185 B 217

– active marketing initiatives aimed at R 87 R 113 R 140 R 171 R 207 0,08 0,08 0,07 0,07 0,07 0,08 0,07 Darker Darker G 6 G 81 G 115 G 153 G 199 stimulation of higher mobile data usage 50% 25% B 140 B 161 B 180 B 201 B 227

and adoption of data-enabled devices

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 – continued increase in 4G-enabled devices R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 DSU, Mb/month APPMb, RUB registered on MegaFon network reaching 50% 25% B 0 B 140 B 168 B 196 B 224 6.5 million DATA ARPU (ARPDU(3)) – growing share of data-enabled devices on MegaFon network in Q2 2015 +7 p.p. y-o-y Growth RUB per Growth month ▲11.8% to 49.0%

▲7.8% OperatingandResultsFinancial Corporate Highlights Financialand 228 222 • APPMB in Q2 2015 decreased by 0.01 216 206 204 213 210 RUB/MB/month y-o-y largely because of stimulation of subscriber shift to data packs and bundled tariffs with high amount of data available

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 1H 2014 1H 2015 • ARPDU in Q2 2015 increased by 11.8% y-o-y

due to faster organic growth in data traffic Quarterly data

Half-year data usage on the back of increasing share of Appendix

“larger” data pack offerings Outlook for 2015 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (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 19 period; (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

Key factors influencing OIBDA margin

Growth Key drivers of OIBDA margin ▲ 1.3% MegaFon

Key components • In Q2 2015, OIBDA increased by 1.3% y-o-y, while About OIBDA margin strengthened by 0.9 p.p. y-o-y to S&M margin G&A margin R 0 R 0 R 100 R 154 R 203 OIBDA Gross profit margin Darker Darker 45.6% due to the following factors: G 152 G 179 G 194 G 212 G 232 margin 44.7% ▲ 0.9 p.p. ▼ 0.6 p.p ▲ 0.6 p.p. 45.6% ▲0.9 p.p. Corporate Highlights Financialand 50% 25% B 95 B 128 B 155 B 185 B 217 (%) - Gross profit margin grew by 0.9 p.p. to 75.3% R 87 R 113 R 140 R 171 R 207 34,3 0,8 0,6 34,7 largely due to the reduced total costs of Darker Darker G 6 G 81 G 115 G 153 G 199 revenues 50% 25%

OIBDA ([ЗНАЧЕНИЕ]) ([ЗНАЧЕНИЕ]) B 140 B 161 B 180 B 201 B 227

(RUB Bn) - Sales & marketing expenses increased by 10.6% R 122 R 136 R 163 R 192 R 222 Darker Darker y-o-y mainly due to higher dealer commissions G 181 G 138 G 165 G 194 G 223 50% 25% resulting from accounting accruals related to B 0 B 140 B 168 B 196 B 224 shift to 12-month revenue sharing with dealers and increased advertising expenses relating to a

new company positioning campaign Financial and OperatingandResultsFinancial

- General & administrative expenses declined by Corporate Highlights Financialand ▲ 0.5% 3.0% due to strict operational efficiency control, lower labor costs, decreased network rollout and modernization costs as a result of the GNOC -0.7% -4.1% 10.6% -3.0% launch

OIBDA Revenue Cost of revenue Sales & General & OIBDA

Q2 2014 Marketing Administrative Q2 2015

y-o-y growth

Appendix Outlook for 2015

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

Net debt and liquidity

• Leverage improvement and debt prepayment Net Debt Build-up As of 31 Dec 2014 As of 30 Jun 2015 Change on the back of strong cash generation MegaFon Cash and cash equivalents 22.2 62.0 39.8 - Net debt/LTM OIBDA at 0.82x level at the About Short-term investments 47.9 14.9 (33.0) R 0 R 0 R 100 R 154 R 203 end of Q2 2015 Darker Darker G 152 G 179 G 194 G 212 G 232 Total debt 206.3 190.5 (15.8) Corporate Highlights Financialand 50% 25% - On 19 May 2015, the Company fully prepaid B 95 B 128 B 155 B 185 B 217 Long-term debt 157.6 143.5 (14.1) RUB 15 bn BO-04 bonds at par value R 87 R 113 R 140 R 171 R 207 Darker Darker Short-term debt 50.2 48.3 (1.9) G 6 G 81 G 115 G 153 G 199 • Liquidity structure is adjusted to the risky 50% 25%

Deferred financial cost (1.6) (1.3) (0.3) B 140 B 161 B 180 B 201 B 227

operational environment and provides cushion Net debt (1) 136.2 113.6 (22.6) R 122 R 136 R 163 R 192 R 222 for immediate and short-term needs Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% - Most of the liquidity kept in hard currencies B 0 B 140 B 168 B 196 B 224 (1) (2) Net debt and Net debt/LTM OIBDA Liquidity split by currency to mitigate FX risks

RUB Bn / (x) Lower - Sufficient RUB liquidity to pay dividends in ▼ 0.08x August

14% OperatingandResultsFinancial 1,04x 0,98x Corporate Highlights Financialand 0,94x • Building up momentum for future network 0,90x 0,82x 41% development

140,3 136,2 - MegaFon signed a Finnvera-covered 118,8 129,1 113,6 45% Financing Facility with Unicredit Bank Austria in the amount of EUR 150 mn,

Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 which will be used to finance purchases of RUB USD HKD the network equipment, software and Net debt Net debt/LTM OIBDA services from Solutions and

Networks Appendix Outlook for 2015

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed 21 (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) Liquidity is calculated as the sum of Cash @ cash equivalents and Short-term investments

Debt profile

Debt portfolio structure MegaFon By instrument By currency By maturity • We maintain a balanced debt portfolio structure and currency mix, allowing us to About % of total R 0 R 0 R 100 R 154 R 203 Darker Darker minimize embedded risks G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% 2% B 95 B 128 B 155 B 185 B 217 17% − Predominant portion of the portfolio is in 23% 21% 26% RUB, allowing us to mitigate FX risks R 87 R 113 R 140 R 171 R 207

2015 Darker Darker

- G 6 G 81 G 115 G 153 G 199 47% • 50% 25%

14% No short-term refinancing risk B 140 B 161 B 180 B 201 B 227 Mar

61% - 14% 18%

31 36% − Major part of Company’s debt becomes R 122 R 136 R 163 R 192 R 222 21% Darker Darker due within 3Y tenor or later G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

2% 11% 18%

26% 25%

Financial and OperatingandResultsFinancial

Corporate Highlights Financialand 2015 - 10% 50%

Jun 58% - 39% 15%

30 14% 32%

Bank Loans RUB 1 Year 2 Years

Equipment Financing USD Swapped(1) 3 Years 4 Years

Bonds USD 5 Years and Longer Appendix

EUR Outlook for 2015

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed 22 (1) — Including structured and plain vanilla FX swaps on a nominal basis

Outlook for 2015

MegaFon About R 0 R 0 R 100 R 154 R 203 Darker Darker Revenue growth Flat y-o-y Reiterate G 152 G 179 G 194 G 212 G 232 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 ≥40% 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 OperatingandResultsFinancial Corporate Highlights Financialand

CAPEX ≤ RUB 65 Bn Modified

Appendix Outlook for2015

23 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 24

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 elected in June-2015 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 Ingrid Maria Stenmark 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

25

…led by a management team with extensive TMT experience

Executive Bodies MegaFon

Ivan Tavrin, Chief Executive Officer Evgeny Chermashentsev, Chief Operating Officer About ● Chief Executive Officer of MegaFon since April 2012 ● Appointed Chief Operating Officer (Executive Director) of R 0 R 0 R 100 R 154 R 203 Darker Darker ● Extensive experience in the Russian media industry, MegaFon in July 2015 G 152 G 179 G 194 G 212 G 232 50% 25% pioneering its development over the past 16 years, including ● Previously Deputy CEO for Infrastructure of MegaFon B 95 B 128 B 155 B 185 B 217 Regional Media Group, Media One Holding, Vyberi Radio ● Joined MegaFon in 2012 R 87 R 113 R 140 R 171 R 207 Group and TV-3 Darker Darker ● Before joining MegaFon held various senior positions at G 6 G 81 G 115 G 153 G 199 ● Board positions outside MegaFon include MO-TV Holdings 50% 25% media and broadcasting companies B 140 B 161 B 180 B 201 B 227

Limited, UTH Russia Limited, Media-One Holdings Limited ● c.20 years of TMT experience and CJSC Kommersant Publishing House. 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 Konstantin Likhodedov, Director, Consumer Business Gevork Vermishyan, Chief Financial Officer ● Director for Consumer Business since September 2015 ● CFO since Jul 2011 ● Previously Director of the Moscow branch of MegaFon ● Previously Director of Corporate Finance at AFK Sistema

● Joined MegaFon in 2012 ● 13 years of finance / 8 years of TMT experience Corporate Highlights Financialand

Dmitry Kononov, Director, Investors Relations and M&A Alexander Bashmakov, Chief Technical Officer ● Director for Business Development, M&A, IR since Dec 2008 ● CTO since August 2015 ● Joined MegaFon in 2000. Served as the Company’s CFO in ● Previously Chief Strategy and Procurement Officer of

2002-2004 MegaFon

● 22 years of TMT experience ● 8 years in management consulting with focus on Telecom &

IT (Accenture and BCG) Appendix

26

MegaFon’s Spectrum Advantage

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

in MegaFon’s network MegaFon

About What What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker . Both operator and end-user equipment already support 2x20 MHz G 152 G 179 G 194 G 212 G 232 700 MHz (LTE) 2x7,5 2x7,5 2x7,5 2x7,5 50% 25% for LTE, no other operator beside MegaFon can provide such band B 95 B 128 B 155 B 185 B 217

length R 87 R 113 R 140 R 171 R 207 800 MHz (LTE) 2x7,5 2x7,5 2x7,5 2x7,5 Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25%

. After implementation of technology neutrality MegaFon is the B 140 B 161 B 180 B 201 B 227

(2) 2x4,8- 2x2,4- 2x0,8- 2x0,6- 900 MHz (2G ) (1) (1) (1) 2x15,6(1) 2x13,2 2x13,6 2x8,4 only operator able to utilize 3 times 2x20 MHz channels (2x20 R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 1 800 MHz MHz in 1800 band and 2 times 2x20 in 2600 band) for LTE 50% 25% 2x14,6- 2x13,6- 2x12- 2x9,4- B 0 B 140 B 168 B 196 B 224 (2G / LTE) 2x30,6(1) 2x44,4(1) 2x29,6(1) 2x44,6(1) . In other technologies all nation-wide operators are almost equal

2 100 MHz (3G) 2x15 2x15 2x15 2x15

. None of nation-wide operators except MegaFon can realize Corporate Highlights Financialand significant benefits from implementing technological neutrality Corporate Highlights Financialand 30 MHz- 2 400 MHz (LTE) - - - 70 MHz

2 600 MHz 25 MHz 25 MHz - - (LTE - TDD(3))

2 600 MHz (LTE) 2x40 2x10 2x10 2x10

Appendix Wider band means higher data transfer Appendix rate and higher capacity of the network

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

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 MegaFon

About 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 50% 25% 20% 30% B 0 B 140 B 168 B 196 B 224 +6% 20% 10% A lot of factors that Such factors as 10%

can lead to strong market maturity, FX Corporate Highlights Financialand 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)

Appendix 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 28

MegaFon’s headline tariffs (Moscow region) (1/2)

TARIFF NAME PRICE FEATURES BEYOND THE PACKAGE MegaFon MegaFon - • 300 minutes on MegaFon subs • On MegaFon subs of Moscow region – 0 RUB/min

199 RUB/ month About

All included XS • 0.5 GB of 3G, 4G+ traffic • Other MegaFon subs – 6.5 RUB/min What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% • 400 minutes B 95 B 128 B 155 B 185 B 217 • On MegaFon subs of Moscow region – 0 RUB/min MegaFon - 390 RUB/ month • 3 GB of 3G, 4G+ traffic All included S • Other MegaFon subs – 6.5 RUB/min R 87 R 113 R 140 R 171 R 207 Darker Darker • 100 SMS/MMS G 6 G 81 G 115 G 153 G 199 50% 25% B 140 B 161 B 180 B 201 B 227

• 600 minutes

• 4 GB of 3G, 4G+ traffic • On MegaFon subs of Moscow region – 0 RUB/min MegaFon - R 122 R 136 R 163 R 192 R 222 590 RUB/ month Darker Darker All included M • 600 SMS/MMS • Other MegaFon subs – 2.9 RUB/min G 181 G 138 G 165 G 194 G 223 50% 25% • Intercity calls — 2.90 rub/min B 0 B 140 B 168 B 196 B 224

• 1,800 minutes in Russia • Bundledtariffs MegaFon - On MegaFon subs of Moscow region – 0 RUB/min 1,290 RUB/ month • 8 GB of 3G, 4G+ traffic • All outgoing calls to other regions of Russia – 2.9 All included L • 1,800 SMS/MMS RUB/min

• Special terms for trips in Russia

Corporate Highlights Financialand Corporate Highlights Financialand • 5,000 minutes in Russia • On MegaFon subs of Moscow region – 0 RUB/min MegaFon - 2,500 RUB/ month All included VIP • 10 GB of 3G, 4G+ traffic • All outgoing calls to other regions of Russia – 2.9 • 5,000 SMS/MMS RUB/min

• Outgoing call on subs of Moscow

region – 1.5 RUB/ min, 0 RUB from

st • Not applicable Switch to zero 0 RUB/ month 21 min

•

9.9 RUB/MB

• Outgoing call on subs of Moscow

tariffs

Appendix Appendix Popular Everything is simple 0 RUB/ month region – 1.6 RUB/min • Not applicable • 9.9 RUB/MB

29

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

MegaFon’s headline tariffs (Moscow region) (2/2)

TARIFF NAME PRICE FEATURES BEYOND THE PACKAGE MegaFon MegaFon - 190 RUB/ month – 1st month • 70 MB of traffic per day nd

Internet XS 7 RUB/day – from 2 month • Maximum speed is not limited About What What MegaFon?is R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% MegaFon - • 3 GB of traffic B 95 B 128 B 155 B 185 B 217 350 RUB/ month • Internet S Maximum speed is not limited • Once a plan data allowance is used, the Internet access will R 87 R 113 R 140 R 171 R 207 Darker Darker automatically be suspended until G 6 G 81 G 115 G 153 G 199 50% 25% MegaFon - • 16 GB of traffic* the next calendar month or until the B 140 B 161 B 180 B 201 B 227

plan is upgraded with other options

Internet M 590 RUB/ month • Maximum speed is not limited R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% MegaFon - • 36 GB of traffic* B 0 B 140 B 168 B 196 B 224 890 RUB/ month

Internet L • Maximum speed is not limited Internettariffsoptions

MegaFon - • Unlimited amount of traffic** 1,290 RUB/ month

Internet XL Corporate Highlights Financialand

• Maximum speed is not limited Corporate Highlights Financialand

• Europe, CIS: incoming, outgoing calls – 13 RUB/min SMS – 11 RUB/ sms Around the world 9 RUB/ day - Roaming tariff • Other countries: incoming, outgoing call – 19 or 43 RUB/ min SMS – 14 RUB/ sms

st

• Incoming calls - 0 RUB/ min from 0 to 30 minutes, from 31 minute – according to the

Whole world – voice tariff option 39 RUB/ day roaming price list of the country of location

Roaming Appendix • 10 MB of traffic per day - from 49 to 329 RUB per day (Europe – 129 RUB/ day) Appendix Internet abroad – data tariff option Depends on country

tariffsandoptions • 30 MB of traffic per day – from 129 to 829 RUB per day (Europe – 329 RUB/day)

30 (*) 50% of traffic is available from 8.00 am to 00.59 am, the rest 50% of traffic is available from 1.00 am to 7.59 am (**) Amount of traffic available is unlimited from 1.00 am to 7.59 am, 30 GB of traffic is available from 8.00 am to 00.59 am

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