Headings and Fonts

000 155 071

Chart Colours

000 155 071

192 192 192 Investor presentation 122 098 166

000 110 038 October 2013

213 234 192 Disclaimer Headings and Fonts

000 155 071 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 similar expressions may identify forward looking statements but are not the exclusive means of identifying such statements. Forward looking statements include statements concerning our plans, expectations, projections, objectives, Chart Colours targets, goals, strategies, future events, future revenues, operations or performance, capital expenditures, financing needs, our 000 plans or intentions relating to the expansion or contraction of our business as well as specific acquisitions and dispositions, our 155 071 competitive strengths and weaknesses, our plans or goals relating to forecasted production, reserves, financial position and future operations and development, our business strategy and the trends we anticipate in the industry and the political, economic, social 192 and legal environment in which we operate, and other information that is not historical information, together with the assumptions 192 192 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, 122 performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are 098 166 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 000 anticipated by such forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only 110 038 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 213 234 factors affecting such statements. 192

2

Agenda

Headings and Fonts Is What MegaFon

000 155

071 01 What is MegaFon

and and

Highlights Q2 2013 Q2

02 Corporate and Financial Highlights Q2 2013 Corporate

Chart Colours Financial Financial

000 155

071 03 Financial and Operating Results Q2 2013

192 2013 Q2

192 Financial and and Financial

192 04 Acquisition of Scartel / Yota Operating Results Results Operating

122 098 05 Outlook for 2013

166 Yota

000 Acquisition

110 of Scartel/ 038

213

234

192

Outlook Outlook for 2013

Headings and Fonts Is What MegaFon

000 155

071

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155

071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213

234

192 01 What is MegaFon

Outlook Outlook for 2013

01 What is MegaFon

Headings and Fonts MegaFon at a glance Is What MegaFon HIGHLIGHTS CONSOLIDATED REVENUE BREAKDOWN 000 155 . 2nd largest Russian mobile operator(1), with over 64 MM subscribers(2) 2012 Revenues 071 STRONG FUNDAMEN- and historically growing market share RUR 272.3Bn

TALS . Unique network position overall on the back of substantial investments Sales of handsets Wireless revenues; and and accessories; 88.5%

. Innovative player with a customer-centric approach and a leading 4.9% Highlights

position in digital services and content Q2 2013 Q2

. Leading 4G/LTE operator providing access to 4G/LTE network in 30 Corporate Chart Colours

Russian regions, covering c.27% of population by the end of Q2 2013 Wireline revenues; Financial 6.6% . Unrivalled LTE spectrum position pro-forma after acquisition of 000 (3)

Scartel/Yota 155 071 . Strong, well-recognised brand 99% of revenues comes from Russia . Extensive retail network of 1,807 own-and-operated stores, complemented with 1,682 3rd party monobrand stores

192 2013 Q2 192 . Managed by a professional team with solid track record COMPELLING HISTORICAL FINANCIAL PERFORMANCE and Financial

192 Operating Results Results Operating . Listed on the London and Moscow stock exchanges since November RUR Bn 2010A 2011A 2012A 2010-12 2012 CAGR

122 Total mobile subscribers (MM) 57.2 62.8 64.6 6.3% 098

166 . Superior historical growth among Big 3 Russian mobile operators with Consolidated revenue 215.3 242.4 272.3 12.5% Yota GROWTH significant future growth potential Consolidated OIBDA 97.6 100.6 117.1 9.6% Margin (%) 45.3% 41.5% 43.0% 000 . Focus on improving operating efficiency and capital expenditure Capex (66.5) (70.6) (45.2) (17.6%) Acquisition 110 of Scartel/ RETURNS 038 management which translates into growing cash flows As % of revenues 30.9% 29.1% 16.6% . Highly attractive shareholder remuneration policy. Last twelve month OIBDA−Capex 31.1 30.0 71.9 52.2% (4)

213 dividend yield of c.5.4% As % of revenues 14.4% 12.4% 26.4%

234 192 Source: Company data.

Note: Outlook Outlook

(1) — By overall mobile revenues and number of subscribers as at Jun-13 for 2013 (2) — Total number of subscribers is over 66 MM in Russia, Tajikistan, South Ossetia and Abkhazia 5 (3) — Closing of the transaction is subject to EGM approval (4) — Calculated as dividend per GDR of RUR 64.51 (equivalent to $1.98) announced on 1 July 2013 over GDR price of $36.55 as of 24 September 2013

01 What is MegaFon

20 years of our success story to become Leading 4G

Headings and Fonts provider in Russia Is What

Launch of 4G/LTE MegaFon services in partnership with Acquisition of a leading telecom operator in Russia 100% stake in 000 Yota, reached 76 155 cities and towns by Yota/Scartel 071 YE 2012 recommended for MegaFon total Revenues shareholder vote (RUB Bn)

Acquisition of 25%

stake in Euroset and

Acquisition Start listing on the Highlights of Net-by-Net LSE and MICEX 2013 Q2

Acquisition of MegaLabs Corporate Chart Colours Synterra launches operations Financial Becomes #2 mobile 000 1st operator to operator in Russia ~20x 155 launch 3G in terms of

071 network in subscribers 1st operator Russia in St. to cover all Peters- Launch of online regions in burg

192 store and Russia 2013 Q2 192 st 1 operator in introduction of and Financial 192 Europe to launch EDGE technology 272.3 Results Operating “MMS” and 1st NorthWest GSM 242.4 acquired nine operator in other regional Russia to 215.3 122 introduce 098 GSM operators 181.9 and renamed “Mobile-TV” 166 Yota MegaFon “NorthWest GSM” founded,

000 launched Acquisition

110 operations in St. of Scartel/ 038 Petersburg

213

234 1993 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E

192

Outlook Outlook for 2013 Source: Company data. 6

01 What is MegaFon

Attractive Russian telecommunications market

Headings and Fonts Is What in the early stages of digital transition MegaFon 000 155 ATTRACTIVE RUSSIAN MARKET FUNDAMENTALS MEGAFON TRACK RECORD OF MARKET SHARE GAINS 071

STRONG MACRO RUSSIAN MOBILE SUBSCRIBERS MARKET SHARE

and and

Russia CEE average(1) WE average(2) (Subscribers in millions) Highlights

Real GDP growth (2012-2015E, %) 3.6 3.0 0.7 188 208 219 228 230 234 ∆ Q2 2013 Q2 GDP per capita (2013E, $ ‘000) 15.7 12.0 37.8

34.4% Corporate Chart Colours 33.4% 32.6% Government Debt/GDP (2012, %) 10.9 36.9 94.7 30.7% 30.9% 30.6% Financial (3.8 pp) 27.4% 000 27.1% 27.1% +3.4 pp 25.4% 25.8% 155 FAVOURABLE COMPETITIVE TELECOM MARKET DYNAMICS 24.2%

071 25.1% 24.3% 24.4% (1.0 pp) . 3 nationwide mobile operators 23.0% 24.5% 23.7% 18.0% 17.8% 17.6% 17.6% 17.2% 17.1% +0.4 pp . Predominantly prepaid market, limited handset subsidies

192 2008 2009 2010 2011 2012 H1 2013 2013 Q2

192 . Telecom market expected to grow at a CAGR of 5.2% during 2012-2015E Financial and and Financial 192 Others . Relatively high OIBDA margin (compared to developed markets) on the Results Operating back of growing ARPU TOTAL REVENUES, 1H2013 DATA REVENUES, 1H2013

122

098 4.7% 13.1% 166 RELATIVELY BENIGN REGULATORY FRAMEWORK Yota (3) 30.9% . MTR, roaming rates, and last mile fiber access are not regulated 24.9% 35.4% 000 (4) 26.8%

. Mobile number portability has not been implemented yet Acquisition

110 of Scartel/ 038 . Local loop unbundling is not implemented 29.1% 35.0%

213

Others

234 Source: Company data, IMF: World Economic Outlook; World Bank; Russian Economic Report; 192 CIA World Factbook, AC&M. Note:

(1) — Includes Ukraine, Belarus, Kazakhstan, Poland, Latvia and Czech Republic Outlook Outlook (2) — Includes Spain, Italy, UK, France and Germany for 2013 7 (3) — Increased Government focus on MTR and potential roaming regulation (4) — In May-12, the Ministry of Communications published a draft law which is expected to implement MNP from Dec-13, however it was reported that MNP introduction may be postponed

01 What is MegaFon

Demonstrating strong operating and financial performance

Headings and Fonts Is What MegaFon SUPERIOR OPERATING PERFORMANCE… … TRANSLATING INTO STRONG FINANCIAL PERFORMANCE 000 155 TOTAL RUSSIA WIRELESS SUBSCRIBERS, MM CONSOLIDATED REVENUE BREAKDOWN, RUR Bn 071 272.3 62.6 64.1 242.4 Growth 61.6 62.1 215.3 13.3 56.6 8.4 17.9 ▲ 7.9% 15.2 and 7.5 5.2 16.1 19.1 21.0 19.6 22.8 129.6 139.9 7.6 Highlights 241.1 8.8 5.5 9.2 202.7 218.8 2013 Q2

115.3 123.1 Corporate

Chart Colours Financial Financial 2010 2011 2012 H1 2012 H1 2013 2010 2011 2012 H1 2012 H1 2013 (1) (2) 000 Data service user base User base not using data service Wireless services Wireline services Equipment & Accessories 155

071 BLENDED RUSSIA ARPU(3) AND BLENDED MOU(4) CONSOLIDATED OIBDA AND OIBDA MARGIN Growth 299 302 ▲ 24.2% 294 288 45.3% 47.6% 285 43.0% 41.5%

192 41.4% 2013 Q2 192 322 and Financial 192 312 310 330 308 97.6 100.6 117.1 53.7 66.7 Results Operating 2010 2011 2012 H1 2012 H1 2013 2010 2011 2012 H1 2012 H1 2013

122 MOU, minutes per month

ARPU, RUR per month 098

166 RUSSIA DATA ARPU (ARPDU(4)) AND DSU(6) CONSOLIDATED CAPEX AND CAPEX MARGIN Yota 1,068 975 30.9% 29.1% 1,264 000 628 16.6% 16.9% Acquisition

110 of Scartel/ 038 256 66.5 70.6 8.9% 45.2 148 164 156 167 21.9 126 12.4

213 2010 2011 2012 H1 2012 H1 2013 2010 2011 2012 H1 2012 H1 2013

234 Data ARPU, RUR per month DSU, Mb/month 192 Operating results provided on this page cover only the Russian Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed business; financial results present consolidated numbers (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 Outlook (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 for 2013 (4) — Total number of minutes in a given period divided by average number of subscribers in such period, divided by number of months in such period 8 (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

01 What is MegaFon

Our new strategy focused on topline growth, cash

Headings and Fonts Is What generation and high shareholder return MegaFon 000 155

071

STRATEGY and Highlights

Deliver superior customer-centric experience in all areas of our operations 2013 Q2 Chart Colours Corporate 1. Strengthen leadership 2. Expand to new and innovative Financial 3. Efficiency and productivity 000 position in core business value added services 155

071 ● Deliver services tailored to needs of ● Capture the value shift from traditional ● Improve Capex efficiency after period of each customer segment telco access services to value added significant infrastructure investment services

192 ● Support and enhance leading position ● Enhance operational efficiency through 2013 Q2 192 in 4G services ● Achieve revenue growth from new VAS reduction of dealer commissions, and Financial 192 verticals: content, mobile financial reduction in churn and cost savings in Results Operating ● Monetise shift from voice to data by services, mobile advertising, cloud & IT IT, network and G&A leveraging #1 infrastructure and leading and M2M (1)

122 position in mobile data market ● Leverage network sharing as a driver of 098 ● Achieve improved customer loyalty and efficiency ● Harvest the significant market 166 incremental revenues from increased Yota opportunity in non-urban broadband data traffic ● Remain Russia focused

000 Acquisition

110 of Scartel/ 038 New strategy with emphasis on cash generation and profitable growth in stark contrast with old strategy that focused on network investments and market share capture 213

Management compensation going forward determined primarily by OIBDA–Capex growth vs. 234

192 previous structure based primarily on top-line and market share growth Outlook Outlook Note: for 2013 9 (1) — In terms of mobile data revenues.

01 What is MegaFon

Headings and Fonts Is What Why invest in MegaFon +83% +93% MegaFon (Unadjusted) (Adjusted for dividends) 000 155 071 Growing cash flows driven by $38 MegaFon share price performance since IPO, $ high OIBDA margins with lower

$36 future capital intensity and

$34 Highlights

$32 2013 Q2 Chart Colours Highly attractive shareholder Corporate remuneration policy $30 Financial

000

$28 155

071 Significant future growth $26 potential $24

192 2013 Q2

192 Financial and and Financial 192 $22 Results Operating

Strong market and company $20

122

fundamentals 098 $18

166 Yota Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13

000 Acquisition

110 A PURE-PLAY RUSSIAN OPERATOR RUN BY A TOP-TIER MANAGEMENT TEAM of Scartel/ 038 LONG-TERM COMMITTED STRATEGIC LEAD SHAREHOLDERS

213 ROBUST CORPORATE GOVERNANCE FRAMEWORK

234

192

Outlook Outlook for 2013 10 Source: Bloomberg as of 24 September 2013

Headings and Fonts Is What MegaFon

000 155

071

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155

071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213 02 Corporate and Financial

234

192 Highlights Q2 2013

Outlook Outlook for 2013

02 Corporate and Financial Highlights Q2 2013

Headings and Fonts Q2 2013 Key corporate events Is What MegaFon CONTINUE TO FOLLOW LONG TERM STRATEGY FOCUSED ON EFFICIENT GROWTH AND MOBILE INTERNET SERVICE DEVELOPMENT: 000 155 071 KEY CORPORATE EVENTS FURTHER IMPROVEMENT OF DEBT PROFILE

. Company celebrated its 20th anniversary in Saint Petersburg . Concluded cross currency swap transaction to mitigate growing currency risk and to economically hedge c. 50% of MegaFon’s and

. Establishment of a global strategic partnership with Telefónica Highlights total net open currency position

S.A. to exploit economies of scale in joint procurement and to Q2 2013 Q2 exchange technological know-how (1) Corporate Chart Colours DECLARED DIVIDENDS OF RUR 64.51 PER 1 ORDINARY SHARE (OR . The CEO has exercised his option under long-term incentive plan PER 1 GDR), AMOUNTING TO RUR 40BN(2) IN TOTAL, WHICH WERE Financial

000 and made further purchases of the Company’s shares in the PAID IN JULY 2013 155 market thus increasing his interest in MegaFon up to 2.55% 071 ACQUISITION OF SCARTEL / YOTA TO STRENGTHEN MEGAFON’S DEVELOPMENT OF MOBILE INTERNET SERVICE IS A PRIORITY LEADING POSITION IN 4G / LTE MARKET IN RUSSIA

192 2013 Q2

192 . Launched sale of MegaFon branded smartphone — “MegaFon . On 12 September 2013 MegaFon’s extraordinary general Financial and and Financial 192 Login” – at RUR 1,990 (c.$ 60) to boost mobile data meeting approved the acquisition of 100% interest in LLC Results Operating consumption Scartel (“Scartel”)/LLC Yota (“Yota”)(3) from Garsdale Services Investment Limited (“Garsdale”)

122

. Continued pioneering of 4G/LTE to support leadership in mobile 098 . Deal consideration: Equity Value of $ 1,180MM for 100% of 166 data Yota Scartel / Yota plus assumption or payoff Net Debt of up to ― Launched 4G/LTE for smartphones and allowed intranet $ 600MM as of 30 June 2013, translating into Enterprise Value 000 roaming services for 4G/LTE users in Russia of c.$ 1,780MM as of 30 June 2013 Acquisition

110 of Scartel/ 038 ― By the end of Q2 2013 MegaFon provided access to 4G/LTE ― Plus assumption or payoff of potential Scartel / Yota Net network in 30 regions in Russia, covering c.27% of Debt increase of up to $ 20MM for each month starting from population in the country

213 1 July 2013 until Closing that is expected at the end of

234 September 192 All financial results provided in this presentation are stated on consolidated IFRS basis unless otherwise mentioned. Note:

(1) — Dividends attributable to four consecutive quarters (from Q2 2012 to Q1 2013) Outlook Outlook (2) — Approximately RUR 3Bn of dividends were paid to the Company’s wholly-owned subsidiary MegaFon International Cyprus Limited, which holds the Company’s for 2013 12 treasury shares (3) — MegaFon to acquire 100% interest in Maxiten Co Limited, holding 100% interest in Scartel and Yota.

02 Corporate and Financial Highlights Q2 2013

Headings and Fonts Q2 2013 Financial and operational highlights Is What MegaFon

000 155 KEY POINTS 071 CONSOLIDATED 2013 72.2 (RUR Billion) 2012 REVENUE 66.6 (up by ▲8.4% y-o-y) . All business revenue streams have demonstrated

organic growth and Highlights

CONSOLIDATED 2013 34.3 . OIBDA growth is primarily driven by increase in 2013 Q2 (RUR Billion) 2012 Corporate

Chart Colours OIBDA 28.2 (up ▲21.8% y-o-y) revenues and continued positive effect from Financial Financial implemented cost optimising initiatives 000 155 OIBDA 2013 071 47.5 . Solid net profit growth reflects strong uplift in

MARGIN (%) 2012 42.2 (up ▲5.3 p.p. y-o-y) operating profit in Q2 2013 vs. Q2 2012 and significantly lower foreign exchange losses

192 2013 Q2

192 Financial and and Financial 192 NET 2013 13.6 . Subscriber base continued to grow supported by Results Operating (1) PROFIT (RUR Billion) 1.7 2012 (up c. ▲8-fold y-o-y) uptake in sales of smartphones and mobile internet

122 devices as well as further stimulation of data usage 098 166 NET PROFIT 2013 18.8 Yota All financial results provided in this presentation are stated on consolidated IFRS basis MARGIN (%) 2.5 2012 (up ▲16.3 p.p. y-o-y) unless otherwise mentioned.

000 Acquisition

110 Note: of Scartel/ 038 (2) 2013 (1) — Net profit attributable to equity holders of the Company. MOBILE SUBSCRIBERS 66.0 (2) — Consolidated data includes subscribers of the Company in Russia and subscribers of (Million, as of 31 March 2013) 2012 its subsidiaries: “TT mobile” CJSC in the Republic of Tajikistan, “AQUAFON-GSM” CJSC in the 63.6 (up ▲3.8% y-o-y) 213 Republic of Abkhazia and “OSTELEKOM” CJSC in the Republic of South Ossetia

234

192 Outlook Outlook 13 for 2013

02 Corporate and Financial Highlights Q2 2013

Strong momentum in mobile data revenue growth continues

Headings and Fonts Is What MegaFon

000 CONSOLIDATED REVENUE GROWTH BRIDGE 155 071 Growth . Solid consolidated revenue growth

RUR Bn ▲ 8.4%

of 8.4% y-o-y and

1.3 72.2 Highlights . Strong mobile data growth seen in previous 0.6 0.3 2013 Q2

0.2 Corporate Chart Colours 0.6 quarters has accelerated in Q2 2013 with 2.6 revenues increasing by 28.7% y-o-y Financial 000 155

071 . Sales of equipment and accessories 66.6 demonstrated significant increase becoming

192 the second largest growth driver in monetary 2013 Q2

192 Financial and and Financial

192 terms in Q2 2013 Operating Results Results Operating ― Revenues grew by 47.4% generating an

122 098 additional RUR 1.3Bn

166 Yota . Voice represented the third largest 000 +28.7% +1.5% +8.0% +11.7% +6.0% +47.4% contribution to total revenue growth in Q2 Acquisition

110 of Scartel/ 038 Revenue Data Voice (1) SMS VAS Wireline Equipment Revenue 2013, adding RUR 0.6Bn to the total Q2 2012 (excl. SMS services and Q2 2013 y-o-y growth and MMS) accessories revenues 213

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

234 Note: 192 (1) — Voice revenues consist of Wireless Services Revenue from Local Subscribers, Interconnection revenues, Roaming Charges to other Wireless Operators and Other mobile revenue.

Outlook Outlook 14 for 2013

02 Corporate and Financial Highlights Q2 2013

Acquisition of Scartel / Yota to strengthen MegaFon’s

Headings and Fonts Is What leading position in 4G / LTE market in Russia MegaFon 000 155 071 ON 12 SEPTEMBER 2013 MEGAFON’S EXTRAORDINARY GENERAL MEETING APPROVED THE ACQUISITION OF 100% INTEREST IN SCARTEL / YOTA

FROM GARSDALE, THE CONTROLLING SHAREHOLDER OF MEGAFON. ONLY NON-INTERESTED SHAREHOLDERS VOTED

— Scartel owns 2x30 MHz nationwide 4G / LTE spectrum in the 2.5-2.6 GHz frequency band and a 4G / LTE network covering over 30 regions in and

Russia or 27% of the Russian population (as of June 2013) Highlights

— Yota provides 4G / LTE mobile internet services to 605k B2C and 43k B2B retail customers using Scartel’s network (as of June 2013) 2013 Q2 Chart Colours — Morgan Stanley advised MegaFon on the transaction and provided a Financial Opinion to the members of MegaFon’s Board of Directors, Corporate representing non-controlling shareholders Financial

000 155 TOTAL CONSIDERATION OF $1.78 BN ON AN ENTERPRISE VALUE BASIS AS OF 30

071 COMPELLING ACQUISITION RATIONALE JUNE 2013 . Significant increase in network capacity and quality, that will strengthen . Equity Consideration of $ 1,180MM, paid on a deferred basis as follows: MegaFon’s leadership position in the fast growing mobile data market 50% of the consideration ($ 590MM) plus interest at 6% p.a. from closing

192 2013 Q2 192 through enhanced overall service offering and customer experience until payment date will be paid on the 1st anniversary of closing while the and Financial 192 remaining consideration ($ 590MM) plus interest at 6% p.a. from closing Results Operating . Ability to carry out 4G / LTE rollout with reduced capex and opex per until payment date will be paid on the 2nd anniversary of closing Mbps of data transmission capacity because of enhanced spectrum 122 . Net Debt of the Target capped at $ 600MM as at 30 June 2013 plus increase position 098 of $ 20MM per month from 1 July 2013 until closing

166 Yota . Considerable cash flow savings in network rollout and maintenance driven principally by elimination of significant current and future 000 operating costs Acquisition

110 IMPACT ON MEGAFON’S FINANCIAL PROFILE of Scartel/ 038 . No change on 2013 guidance on revenue growth, OIBDA margin or capex

213 . No change in dividend policy

234

192 Outlook Outlook 15 for 2013

Headings and Fonts Is What MegaFon

000 155

071

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155

071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213 03 Financial and Operating

234

192 Results Q2 2013

Outlook Outlook for 2013

03 Financial and Operating Results Q2 2013

Key highlights: Strong revenue growth

Headings and Fonts Is What and further margin expansion MegaFon 000 155 REVENUE, OIBDA AND NET PROFIT 071 Growth Growth ▲ 8.4% ▲ 7.9%

. Our strong Q2 2013 performance derived

129.6 139.9 and 66.6 71.1 71.6 67.7 72.2 from 8.4% y-o-y topline growth in Revenue revenue from the core business, Highlights including 28.7% growth in data revenue, 2013 Q2 Chart Colours Corporate and 47.4% growth in revenue from sales Financial Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 000 of handset and accessories 155 Growth Growth 071 ▲ 21.8% ▲ 24.2% . Our continuous focus on operating 32.0 31.4 32.4 34.3 OIBDA and 28.2 66.7 efficiency initiatives together with strong 47.8% 47.5% 53.7 192 47.6% revenue growth resulted in an OIBDA 2013 Q2 192 OIBDA margin 45.0% 43.9% 42.2% 41.4% and Financial 192 margin of 47.5% in Q2 2013 growing by Results Operating +5.3pp y-o-y Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

122 098 . Net profit(1) grew by more than 8-fold 166 Growth Growth Yota ▲ 714.7% ▲ 139.9% y-o-y in Q2 2013 driven by the solid 18.6 26.2 growth in operating income and 000 14.9 13.6 Net profit(1) and Net 12.6 Acquisition

110 25.9% improved foreign exchange position: RUR of Scartel/ 038 profit margin 20.9% 18.6% 18.8% 10.9 18.7% 1.7 2.2Bn of forex losses in Q2 2013 vs. RUR 8.4% 2.5% 9.9Bn in Q2 2012 213

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

234 192

Quarterly data, RUR Bn Half-year data, RUR Bn % of Revenue Outlook Outlook Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013 17 (1) — Net profit attributable to equity holders of the Company.

03 Financial and Operating Results Q2 2013

Key highlights: Continued cash flow growth driven

Headings and Fonts Is What by high margins and lower CAPEX MegaFon 000 155 Lower Lower CAPEX, OIBDA-CAPEX, FREE CASH FLOW 071 ▼ 31.7% ▼ 43.3%

16.1 21.9 . CAPEX for Q2 2013 amounted to RUR

12.2 and 7.2 8.3Bn CAPEX 8.3 12.4 Highlights 22.5% 4.1 18.3% . OIBDA-CAPEX increased by 62.8% y-o-y 2013 Q2 10.1% 16.9% 6.0% 11.6% 8.9%

Chart Colours in Q2 2013 Corporate Financial Financial Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 Free Cash Flow grew by 18.2% y-o-y in 000 Growth Growth . 155 ▲ 62.8% ▲ 70.8% Q2 2013, primarily driven by an increase 071 24.9 28.3 26.0 54.3 in cash flow from operating activities and 41.8% 38.7% lower CAPEX 15.9 15.3 35.9% 31.7 192 OIBDA-CAPEX 35.0% 2013 Q2

192 Financial and and Financial 192 23.9% 21.4% 24.5% Results Operating

122 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 098

166 Growth Growth Yota ▲ 18.2% ▲ 58.5% 24.6 22.9 22.6 45.5 000 19.1 17.5 Acquisition 110 Free Cash Flow 28.7 of Scartel/ 038 34.6% 33.8% 31.2% 32.5% 28.6% 24.4% 22.1%

213

234 192 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

Quarterly data, RUR Bn Half-year data, RUR Bn % of Revenue Outlook Outlook 18 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013

03 Financial and Operating Results Q2 2013

Breakdown of consolidated revenue

Headings and Fonts Is What MegaFon

000 RUR Bn Growth Growth Growth Growth WIRELESS SERVICES, WIRELINE 155 ▲8.4% ▲ 8.0% H1 2013 vs. Q2 2013 vs. SERVICES AND EQUIPMENT & 071 Q2 2012 H1 2012 139.9 ACCESSORIES REVENUES 129.6 ▲ 38.2% 71.6 72.2 7.6

71.1 and 67.7 5.5 9.2 ▲ 4.1% 66.6 3.6 4.2 4.0 ▲ 47.4% . Consolidated revenue grew by

8.8 Highlights 2.7 4.6 4.5 3.6 4.7 ▲ 6.0%

4.4 4.5 8.4% in Q2 2013 driven by data Q2 2013 Q2

revenue expansion, an increase in Corporate Chart Colours subscriber base, strong demand Financial

000 for airtime and sales of equipment 155 123,1 ▲ 6.8% 115.3 and accessories ▲ 6.8% 071 59.5 62.9 62.9 59.6 63.5 . Sales of equipment and

192 2013 Q2

192 accessories increased by 47.4% in Financial and and Financial 192 Q2 2013 vs. Q2 2012, driven by Results Operating Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 expansion of our retail network,

122

and significant increase in Q2 098 Wireless services Wireline services

166 2013 in the number of MegaFon Yota Equipment & Accessories customized smartphones and Revenue mix (%) 000

mobile internet devices sold, Acquisition Wireless 110 89.3% 88.5% 87.8% 88.0% 88.0% 89.0% 88.0% of Scartel/ 038 services (1) including branded smartphones Wireline 6.6% 6.4% 6.3% 6.7% 6.5% 6.8% 6.6% (“MegaFon Login”) services

213 Equipment &

4.1% 5.1% 5.9% 5.3% 5.5% 4.2% 5.4% 234 accessories 192

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

(1) — Wireless services revenue includes monthly fees, airtime revenues, own subscriber roaming, connection fees, data for 2013 19 revenue, value added service (“VAS”) revenue, wireless interconnection revenues, roaming charges to other wireless operators and other wireless services revenues

03 Financial and Operating Results Q2 2013

Breakdown of Russia wireless services Results provided on this page cover only the Russian business

Headings and Fonts Is What revenues MegaFon Growth Growth 000 RUR Bn VOICE, DATA, SMS AND OTHER VAS ▲6.7% Growth ▲6.7% Growth 155 Q2 2013 vs. H1 2013 vs. REVENUES IN RUSSIA 071 Q2 2012 121.7 H1 2012 62.8 114.0

62.1 62.0 11.3 ▲ 10.3% . Russian wireless services revenue

58.9 58.9 10.2 and 5.1 5.8 5.7 ▲ 12.0% 6.4 ▲ 5.0% grew by 6.7% in Q2 2013 to RUR

5.1 ▲ 8.0% Highlights 2.9 3.5 5.6 3.1 6.0 62.8Bn, a faster rate than the 2.9 3.3 22.4 ▲ 24.5% 10.0 11.4 ▲ 28.2% 18.0 growth in subscriber base 2013 Q2 8.9 10.6

Chart Colours 11.0 (3.2% y-o-y) Corporate Financial Financial . Mobile data remains the fastest 000 155 growing revenue stream as

071 ▲ 1.4% ▲ 2.4% demonstrated by its significant 42.1 44.1 42.1 42.6 79.8 81.6 39.0 growth of 28.2% y-o-y and

192 comprises almost 18.2% of total 2013 Q2

192 Financial and and Financial

192 Russian wireless services revenues Operating Results Results Operating (vs. 15.1% in Q2 2012) Q2 1012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

122 . Revenue from VAS (excluding SMS 098 Voice Data transfer (Data) and MMS) increased by 12.0% y-o-y

166 Yota Revenue SMS (Messaging) VAS (excl. SMS & MMS) mix (%) in Q2 2013 primarily due to

(1) increased usage of content and 000 Voice 71.4% 70.9% 67.9% 66.3% 67.8% 69.9% 67.0% other VAS services Acquisition 110 Data transfer of Scartel/ 038 15.1% 16.2% 17.1% 18.6% 18.2% 15.8% 18.4% (Data) . Revenue from SMS increased by SMS 4.8% 4.7% 6.0% 5.4% 5.1% 5.2% 5.3% 8.0% due to active promotion of (Messaging)

213 tariff plans encouraging higher

VAS (excl. 234 8.7% 8.2% 9.0% 9.7% 8.9% 9.1% 9.3% 192 SMS & MMS) usage of SMS

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed Outlook Outlook (1) — Voice includes revenues from: local subscribers which includes monthly fees, airtime revenues, own subscriber for 2013 20 roaming and connection fees; wireless interconnection revenues; roaming charges to other wireless operators; and other wireless revenues

03 Financial and Operating Results Q2 2013

Drivers of Russia total wireless services Results provided on this page cover only the Russian business

Headings and Fonts Is What revenues: Wireless subscribers MegaFon 000 (m) TOTAL RUSSIA WIRELESS SUBSCRIBERS Growth 155 INCLUDING BREAKDOWN OF DATA 071 ▲3.2%

SERVICE USERS

Growth and

▲16.3% . Our continuous focus on improving Highlights customer service and reducing churn 64.1 2013 Q2

62.1 62.8 62.6 62.7 rates via new revenue-share Corporate Chart Colours programmes with dealers Financial

000 contributed to the steady growth in

155 19.3 20.0 21.0 21.9 22.4 071 our subscriber base by c.3.2% y-o-y . Data service user base grew by

192 2013 Q2

192 16.3% y-o-y due to effective strategy Financial and and Financial 192 of promoting data services, Results Operating including 4G/LTE

122 098 ― Wireless data services users

166 Yota accounted for 35.0% of the Company’s total subscriber base

000 Acquisition

110 as at 30 June 2013 vs. 31.0% as of Scartel/ 038 at 30 June 2012

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013

213

234 Data service user base (1) User base not using data service (2) 192

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed Outlook Outlook (1) — Data Service User is defined as a Subscriber who has used any of our data transfer services within the preceding three months for 2013 21 (2) — Active subscribers that do not comply with the definition of Data Service User Base

03 Financial and Operating Results Q2 2013

Breakdown of Russia wireless services Results provided on this page cover only the Russian business

Headings and Fonts Is What revenues: MoU and APPM MegaFon 000 (1) (2) . Blended MOU increased by 9 155 BLENDED MOU & BLENDED APPM 071 Growth Growth minutes in Q2 2013 y-o-y largely

▲3.0% ▲2.7% due to launch of national tariff

310 and 301 301 309 294 294 302 plan “Switch to Zero” stimulating

on-net traffic Highlights Q2 2013 Q2

1.10 . Continued effort of switching to Corporate Chart Colours 1.06 1.07 1.07 1.07 1.07 1.05 federal tariffs in order to optimise Financial

000 product development and tariff 155 management 071 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 . Blended APPM grew slightly y-o-y MOU, minutes per month APPM, RUR and stabilised at RUR 1.07 level

192 2013 Q2 192 (3) similar to the past two quarters and Financial

192 BLENDED ARPU Operating Results Results Operating RUR per Growth Growth . Blended ARPU grew by 4.7% in Q2 month ▲4.7% ▲4.5% 2013 vs. Q2 2012 primarily driven 122

318 331 330 314 333 098 308 322 by increased smartphone

166 Yota penetration boosting usage of VAS

000 Acquisition

110 of Scartel/ 038

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

213 Quarterly data Half-year data

234 192 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed

(1) — Total number of minutes in a given period divided by average number of subscribers in such period, divided by number of Outlook Outlook

months in such period; (2) — ARPU for a given period divided by MOU in such period; (3) — Total wireless services revenues (including for 2013 interconnection and roaming charges but excluding connection revenues) for a given period divided by average number of wireless 22 subscribers in such period, divided by number of months in such period

03 Financial and Operating Results Q2 2013

Breakdown of Russia wireless services Results provided on this page cover only the Russian business

Headings and Fonts Is What revenues: DSU and APPMb MegaFon 000 (1) (2) . Significant DSU growth was driven 155 DSU & APPMB 071 Growth Growth by continued 4G/LTE rollout and

▲29.3% ▲29.6% launch of attractive tariffs for this

1,264 and 1,221 1,301 1,254 technology, along with the growth 1,035 975 Highlights 970 of smartphone and tablet

0.16 penetration 2013 Q2 Corporate Corporate Chart Colours 0.16 0.16 0.13 0.14 0.13 0.14 ― DSU increased by 284 Mb or by Financial 000 29.3% y-o-y 155 071 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013 . We managed to stop the decline of DSU, Mb/month APPMb, RUR APPMb, which was driven by the

192 switch of the focus from high 2013 Q2 192 (3) and Financial 192 DATA ARPU (ARPDU ) traffic-consuming dongles to more RUR per Growth Growth Results Operating month ▲10.4% ▲7.1% cost-effective smartphones and 168 168 167 170 167 122 tablets 098 154 156

166 . All these efforts resulted in 10.4% Yota ARPDU growth y-o-y

000 Acquisition

110 of Scartel/ 038

Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

213 Quarterly data Half-year data

234 192 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, Outlook Outlook divided by number of months in such period; (2) — ARPDU for a given period divided by DSU in such period; (3) — Total data revenues for 2013 23 in a given period divided by average number of data service subscribers during such period, divided by number of months in such period

03 Financial and Operating Results Q2 2013

Strong gross profit and gross

Headings and Fonts Is What profit margin improvement MegaFon 000 RUR Bn GROSS PROFIT(1) AND GROSS PROFIT 155 071 Growth Growth MARGIN

▲8.6% ▲9.7%

106.4 . Gross profit grew by 8.6% in Q2 and

2013 y-o-y (exceeding the 8.4% y-o- Highlights 53.8 54.6 54.5 97.0 51.9 y growth in Revenue) as a result of: 2013 Q2 50.2 Chart Colours Corporate ― Revenue from wireless and Financial wireline revenues increased by 000 155 c.6.6%, while corresponding cost 071 76.1% 76.3% 76.7% 74.8% of services and SIM-cards sold 75.6% 75.3% 75.5% increased by only 0.4%, partially

192 2013 Q2 192

explained by positive effect from and Financial 192 VAS Media acquisition Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 H1 2012 H1 2013

213

234 Quarterly data Half-year data % of Revenue

192 Outlook Outlook Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013 24 (1) — Total Gross profit calculated as Total revenues (consolidated) less Cost of services and Cost of equipment and accessories.

03 Financial and Operating Results Q2 2013

Key drivers of strong OIBDA margin

Headings and Fonts Is What improvement MegaFon 000 KEY FACTORS INFLUENCING SIGNIFICANT 155 % Key components 071 OIBDA MARGIN IMPROVEMENT Y-O-Y OIBDA

(RUR Bn) 28.2 ▲5.6 ▼1.3 ▲0.3 ▲0.9 ▲0.6 34.3 (▲21.8%) . OIBDA increased by 21.8% in Q2 and

2013 y-o-y (from RUR 28.2Bn to RUR Highlights

47.5% (▲5.3pp) 34.3Bn) and OIBDA margin 2013 Q2 4.8% 0.8% 0.5% Chart Colours 0.3% increased by 5.3pp (from 42.2% to Corporate -1.1% 47.5%) Financial 000 42.2% 155 ― The key drivers of the growth

071 were the continuing increase in revenue and streamlining of

192 2013 Q2

192 operating expenses, such as Financial and and Financial 192 advertising, dealer commissions, Results Operating personnel costs and other

122 098 general and administrative

166 expenses Yota +8.4% +7.6% -15.0% -28.1% -3.5%

000 OIBDA margin Revenue Cost of revenue Advertising Dealer and General & OIBDA margin Acquisition 110 Q2 2012 cash collection Administrative Q2 2013 of Scartel/ 038 comissions

Gross profit Sales & Marketing

213

234

192 Outlook Outlook Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013 25 (1) — Total Gross profit calculated as Total revenues (consolidated) less Cost of services and Cost of equipment and accessories.

03 Financial and Operating Results Q2 2013

Consolidated CAPEX Is What Headings and Fonts (1) CAPEX AND CAPEX MARGIN MegaFon RUR Bn 000 . CAPEX for Q2 2013 amounted to RUR 155 Lower Lower 071 8.3Bn and for H1 2013 – RUR ▼31.7% ▼43.3%

12.4Bn

16.1 21.9 and

. Our relatively low CAPEX in H1 2013 Highlights

was due to several factors: 2013 Q2

Chart Colours ― As part of our plan to reduce Corporate Financial Financial 12.2 CAPEX, we have been working 000

intensively with various 155 071 12.4 international vendors on achieving best terms for our 8.3 future 3G and 4G network rollout

192 7.2 2013 Q2

192 and modernization of 2G and 3G Financial and and Financial 192 network, that would allow us to Results Operating optimise our medium term

122 investment programme and

4.1 098 22.5% realize significant savings. The 166 18.3% 10.1% Yota 16.9% tenders were completed in July 11.6% 8.9% 2013

000 6.0% Acquisition

110 of Scartel/ 038 ― We expect acceleration of our CAPEX in H2 2013, once all terms H1 2012 H1 2013 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 of the agreements and tender 213

documents are finalized 234 Quarterly data Half-year data % of Revenue

192 Outlook Outlook Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013 26 (1) — MegaFon CAPEX refers to actual CAPEX accrued for the year and may not match cash flow CAPEX.

03 Financial and Operating Results Q2 2013

Growing cashflow continues to be supported

Headings and Fonts Is What by cost and CAPEX optimisation MegaFon 000 . Cash flow continued to grow 155 QUARTERLY DEVELOPMENT OF OIBDA MARGIN, CAPEX AS % OF REVENUE AND OIBDA-CAPEX MARGIN impressively in Q2 2013 as a 071 ON AN LTM BASIS

result of successful

46.0% LTM implementation of various and 44.7% 44.1% 44.7% Highlights 43.0% 43.0% Quarterly initiatives aimed at improving 41.5% 40.9% 40.8% 41.7% OIBDA as % profits and optimising CAPEX 2013 Q2 Chart Colours of Revenue Corporate 10.9% Financial 000 155

071 33.8% 34.1% 32.8% 33.4% LTM

192 OIBDA-CAPEX 2013 Q2 192 29.1% and Financial 192

as % of Revenue Results Operating 26.9% 24.6%

122 098 20.4% 166 LTM Quarterly Yota 16.6% CAPEX as % of 000 14.3% 12.6% Revenue Acquisition

110 of Scartel/ 038 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

213 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013

234

192 Outlook Outlook Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed for 2013 27 (1) — Q1’2013 OIBDA-CAPEX minus Q1’2012 OIBDA-CAPEX.

03 Financial and Operating Results Q2 2013

Headings and Fonts Consolidated balance sheet and leverage Is What MegaFon BALANCE SHEET AS AT 31 DEC 2012 AS AT 30 JUNE 2013 KEY BALANCE SHEET ITEMS 000 155 Cash and cash equivalents 2.4 24.9 071 . Liquidity sufficient to distribute

Short-term investments 22.2 47.8 excess cash to shareholders while

Total debt 145.2 149.4 maintaining substantial cash and

Long-term debt 126.5 140.2 position Highlights Q2 2013 Q2 Short-term debt 19.9 10.3 ― RUB 40Bn dividends approved by Chart Colours Corporate Deferred financial cost (1.2) (1.1) Annual General Meeting on 28 June Financial Net debt (1) 120.6 76.7 2013 and paid in July 2013; 000 c.RUR 3Bn of dividends were paid to 155 Shareholders’ equity (2) 117.9 112.8 071 the Company’s wholly-owned Total assets 351.4 386.2 subsidiary MegaFon International Cyprus Limited, which holds the 192 NET DEBT AND NET DEBT / LTM OIBDA (1) 2013 Q2 192 Company’s treasury shares and Financial

192 RUR Bn / (x) Operating Results Results Operating 1.47x . Continued deleverage in Q2 2013 on 1.25x 1.03x the back of strong cash generation 122 098 154.8 0.81x

166 138.6 0.59x ― Net debt/LTM OIBDA ratio was 0.59x Yota 120.6 in Q2 2013 compared to 1.03x in Q4 100.8 76.7

000 2012 or 0.81x in Q1 2013 Acquisition

110 of Scartel/ 038 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Net Debt Net debt/LTM OIBDA 213

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed 234 192 (1) — Net debt is calculated as the difference between (a) cash, cash equivalents, principal amount of deposits and (b) principal amount of loans and borrowings less unamortized debt issuance fees.

(2) — Including non-controling interests. Outlook Outlook 28 for 2013

03 Financial and Operating Results Q2 2013

Headings and Fonts Debt profile Is What MegaFon DEBT PORTFOLIO STRUCTURE 000 155 071 By Instrument By Currency By Maturity . Comfortable level of debt preserved

throughout the 2nd quarter 2013: % OF TOTAL and

― No short-term refinancing risk Highlights 4% 15% 6%

21% 2013 Q2 23% ― Diversified lending base and 25% Corporate Chart Colours

2013 financing instruments Financial Financial

- 23% Mar

- . Further debt portfolio optimisation 000 25% 54%

71% 155 31 33%

071 ― Approximately 50% of total net foreign currency position were economically hedged by entering

192 2013 Q2 192 into a structured cross-currency and Financial 192 swap for USD denominated debt, Results Operating 14% 7%

20% which allowed us to mitigate our 122 21% 3%

098 5% exposure to rising currency risks

2013 - 166 32% Yota

Jun ― Increased RUB portion of the debt - 28% 52% 30 76% portfolio to c.76%

000 42% Acquisition

110 RUB 60Bn Exchange Bond program of Scartel/ 038 . Bank Loans RUB 1 Year 2 Years registered with MICEX: Bonds EUR 3 Years 4 Years 213 ― An important potential pool of

Equipment Financing USD 5 Years and Longer 234 192 liquidity and an opportunity to

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed further diversify financing sources Outlook Outlook 29 for 2013

Headings and Fonts Is What MegaFon

000 155

071

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155

071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213

234

192 04 Acquisition of Scartel/Yota

Outlook Outlook for 2013

04 Acquisition of Scartel/Yota

The only operator in Russia with an up-and-running

Headings and Fonts Is What multicity 4G / LTE network MegaFon 000 155 SCARTEL / YOTA OVERVIEW 071

KEY ASSETS: SERVICES PROVIDED:

. 2x30 MHz nationwide spectrum in the 2,500-2,530 MHz / . Mobile internet services to 605k B2C and 43k B2B customers as and

2,620-2,650 MHz frequency band of 30 June 2013 (c.82% of total revenues), as well as other Highlights

telecom operators on an MVNO basis (c.6% of total revenues) 2013 Q2 ― No embedded coverage or investment obligations Chart Colours ― Currently, MegaFon is the only operator with an MVNO Corporate ― License is to be automatically prolonged in 10 years time Financial agreement in place with Scartel since grant 000 . Sales of user devices (65% USB dongles, 35% of Wi-Fi routers) 155 . Network infrastructure covering over 30 regions in Russia or 071 through its own retail network consisting of 69 points of sales 27% of the Russian population as of 30 June 2013 (c.10% of total revenues)

192 CURRENT GROUP STRUCTURE: 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating Garsdale BVI Kable Global BVI(1)

122 99% 1% 098 Transaction perimeter

166 Maxiten Co Limited Yota Cyprus 100% 100% 000 LLC Scartel LLC Yota Acquisition

110 of Scartel/ 038 Russia Russia

Network 213 Spectrum Subscribers

Infrastructure 234

192 Outlook Outlook Note: Preliminary unadited KPIs as of June 2013 or for H1 2013, unless otherwise stated. for 2013 31 (1) — 100% owned by Garsdale BVI

04 Acquisition of Scartel/Yota

The only operator in Russia with an up-and-running

Headings and Fonts Is What multicity 4G / LTE network (Continued) MegaFon 000 (1) (2) 155 TOWNS COVERED BY LTE/4G ON AIR KEY FINANCIALS TOP 10 CITIES WHERE SERVICE IS LIVE 071 RUB MM 2012 # City Population % of Russia Total Revenue 3,970 11.5 MM 8.1%

1 Moscow and and

Gross Profit 1,980 2 St. Petersburg 4.9 MM 3.4% Highlights Margin (%) 49.9% 3 Novosibirsk 1.5 MM 1.0%

EBITDA Adj. (1,469) 4 Samara 1.2 MM 0.8% 2013 Q2

Chart Colours Margin (%) (37.0%) 5 Kazan 1.1 MM 0.8% Corporate Financial Financial Capex 10,428 6 Ufa 1.1 MM 0.7%

000 % of Sales 262.7% 7 Krasnoyarsk 1.0 MM 0.7%

155 PP&E 13,925 8 Krasnodar 0.7 MM 0.5% 071 9 Vladivostok 0.6 MM 0.4% 10 Khabarovsk 0.6 MM 0.4%

192 Other 11.7 MM 8.2% 2013 Q2

192 Financial and and Financial

192 Total 38.7 MM 27.0% Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213

234 192

Note: Preliminary unadited KPIs as of June 2013 or for H1 2013, unless otherwise stated. Outlook Outlook (1) — Source: Financial due diligence report on Scartel / Yota, MegaFon analysis for 2013 32 (2) — As of June 2013

04 Acquisition of Scartel/Yota

Compelling acquisition rationale—

Headings and Fonts Is What Unique spectrum position and best product in the market MegaFon 000 155 I. ACQUISITION PROVIDES MEGAFON WITH A UNIQUE SPECTRUM POSITION: 071

. Results in MegaFon’s unique spectrum position 2 x 40 MHz

― MegaFon’s 2.5-2.6 GHz band is adjacent to and Highlights Scartel’s spectrum thus providing MegaFon with 2.5-2.6 GHz 2 x 30 immediate significant increase in network Band MHz 2013 Q2

Chart Colours capacity Corporate Financial Financial 2.5-2.6 GHz 2 x 10 2 x 10 2 x 10 2 x 10 2 x 10 . Potential introduction of tech neutrality in the future Band MHz MHz MHz MHz MHz 000 155 is not expected to change the current dynamics MegaFon MegaFon MTS VimpelCom Rostelecom 071 meaningfully, given that voice services on 2G and 3G Post Acquisition Pre Acquisition networks must be maintained in the near future Not taking into account 2 x 7.5 MHz in 800 MHz spectrum band that each operator has.

192 2013 Q2 192 II. STRENGTHENS MEGAFON'S LEADERSHIP POSITION IN THE FAST GROWING MOBILE DATA MARKET: and Financial

192 Operating Results Results Operating . Best product in the market: enhanced overall service offering and customer experience through superior data transmission

122 quality (higher speeds, wider coverage, improvement of 3G performance through offloading of data to 4G/LTE) 098

166 . Positions MegaFon as the leading 4G/LTE operator in Russia, consistent with its data leadership strategy Yota . 4G/LTE is expected to be the key driver of mobile data market in the next 24-36 months as affordable 4G/LTE handsets become 000 available in Russia Acquisition

110 of Scartel/ 038 . Time to market advantage ― Scartel’s spectrum is largely ready to be used for 4G/LTE services

213

234

192 Outlook Outlook 33 for 2013

04 Acquisition of Scartel/Yota

Compelling acquisition rationale —

Headings and Fonts Is What Best product in the market (Continued) MegaFon 000 155 III. CONSIDERABLE CASH FLOW SAVINGS: 071

. Considerable cash flow savings in network rollout and maintenance driven principally by elimination of significant

current and future operating costs and

. Reduced capex and opex per Mbps of data transmission capacity because of enhanced spectrum position Highlights Q2 2013 Q2

Chart Colours . Increase in market share and revenues Corporate Financial Financial ― High density areas: Ability to serve more customers / offer more bandwidth per customer than competitors, due to 000 155 MegaFon’s superior spectrum position

071 ― Rural areas: Ability to provide services in more rural areas that competitors with inferior spectrum position will find uneconomic to serve

192 2013 Q2

192 Financial and and Financial 192 Illustration of capex efficiency of owning 2 x 40 MHz vs. 2 x 10 MHz in the Current Proforma for 2.5-2.6 GHz frequency band situation acquisition Results Operating Amount of spectrum owned 2 x 10 MHz 2 x 40 MHz

122 098

166 Capacity provided by one base station 9 Mbps 36 Mbps Yota

000 Capex incurred per 1Mbps of Capacity – Co-located base station c.$3.4k/Mbps c.$1.2k/Mbps Acquisition

110 of Scartel/ 038 – Greenfield base station c.$8.0k/Mbps c.$1.8k/Mbps Capex efficiency multiple of owning 2 x 40 MHz vs. 2 x 10 MHz of spectrum 213

– Co-located base station 2.9x 234

192 – Greenfield base station 4.5x Outlook Outlook 34 for 2013

04 Acquisition of Scartel/Yota

Headings and Fonts Attractive transaction structure Is What MegaFon

000 KEY TERMS 155 071 . At closing the full ownership of the Target will be transferred from Garsdale to MegaFon

CONSIDERATION: and and

. (i) Equity Consideration of $ 1,180MM, paid in two deferred installments: 50% of the consideration ($ 590MM) will be Highlights

paid on the 1st anniversary of closing and the remaining consideration ($ 590MM) on the 2nd anniversary of closing 2013 Q2

Chart Colours ― Both payments will accrue interest at 6% p.a. from closing until payment date Corporate Financial Financial . (ii) Assumption or payoff of up to $ 600MM of Net Debt (including c.$ 400MM held by selling shareholder group) 000 155 translating into Enterprise Value of c.$ 1,780MM as of 30 June 2013

071 ― Plus assumption or payoff of potential Net Debt increase of up to $ 20MM for each month starting from 1 July 2013 until closing that is expected at the end of September 2013

192 2013 Q2

192 Financial and and Financial

192 . The potential Transaction will be financed from MegaFon’s operating cash flow, no new financing required Operating Results Results Operating

122 Attractive transaction structure for 098

166 MegaFon Yota

000 Acquisition

110 of Scartel/ 038 . Deferred payment of Equity Consideration . Allows MegaFon to maintain its attractive dividend policy

213

234

192 Outlook Outlook 35 for 2013

04 Acquisition of Scartel/Yota

Headings and Fonts Conclusion Is What MegaFon

000 155

071 . Unique opportunity to acquire a stronghold in the 4G/LTE segment:

“We buy the future, not the past” and Highlights

. Enhanced spectrum position provides MegaFon with long-term sustainable competitive 2013 Q2 Chart Colours Corporate

advantage and best product offering for consumers Financial

000 155

071 . Acquisition is consistent with MegaFon’s data leadership strategy

192 . Significant cash flow improvement that MegaFon can capitalise on going forward 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating . Attractive transaction structure

122 098 166 . No impact on MegaFon’s attractive dividend policy Yota

000 Acquisition

110 of Scartel/ 038 . Supported by majority of non-interested MegaFon shareholders

213

234

192 Outlook Outlook 36 for 2013

Headings and Fonts Is What MegaFon

000 155

071

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155

071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating

122 098

166 Yota

000 Acquisition

110 of Scartel/ 038

213

234

192 05 Outlook for 2013

Outlook Outlook for 2013

05 Outlook for 2013

Headings and Fonts Outlook for 2013 Is What MegaFon

000 155 071 REITERATED

REVENUE GROWTH High single digit revenue growth

and and

Highlights Q2 2013 Q2

Chart Colours Corporate Financial Financial

000 155 OIBDA MARGIN 42.5—44.0% REITERATED 071

192 2013 Q2

192 Financial and and Financial

192 Operating Results Results Operating Expected capital expenditures

122 CAPEX REITERATED 098 in the range of RUR 55—60Bn 166 Yota

000 Acquisition

110 of Scartel/ 038

213

234

192 Outlook Outlook 38 for 2013 Headings and Fonts

000 155 071

Chart Colours

000 155 071

192 192 192

122 098 166

000 110 038

213 234 192

39 Headings and Fonts For further information visit our IR website 000 http://ir.megafon.com: 155 071

Chart Colours

000 155 071

192 192 192

122 098 166 Contact Information

000 MegaFon Investor Relations 110 038 30 Kadashevskaya embankment Moscow, 115035, Russia Tel.: +7 495 926 2012 213 234 Email: IR@megafon.ru 192 Web: ir.megafon.com