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

November 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 Q3 and 9m 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 9M 2015 revenue breakdown MegaFon

Strong • 2nd largest Russian mobile operator(1), with 73.9m subscribers(2) and RUB 231.4bn 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; 87.1% Darker Darker G 6 G 81 G 115 G 153 G 199 5.8% 50% 25%

• Leading /LTE operator providing access to 4G/LTE network in 75 B 140 B 161 B 180 B 201 B 227

Russian regions to 53.0%(3) of population by the end of Q3 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 • 7.1% 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 2,079 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 9M 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% 75.9 • 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% 231.4 • 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% 102.8 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% (46.5) Returns management which translates into growing cash flows As % of revenues 30.9% 29.1% 16.6% 15.9% 17.9% 20.1% OIBDA−Capex 31.1 30.0 71.9 85.4 82.0 27.4% 56.3 • 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% 24.3%

Source: Company data. 5 Note: (1) – By overall mobile revenue and number of subscribers as of the end of Q3 2015 in Russia (2) – Total number of subscribers as of the end of Q3 2015 was 75.9m 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 50% 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.

Russian telecom dividend play

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

commitment to efficiency and dividends Share price performance since January 2014

MegaFon What What MegaFon?is

35,0 About

What MegaFon?is 30,0 R 0 R 0 R 100 R 154 R 203 3Q15: Solid, reassuring, but good things could still take time to Darker Darker

G 152 G 179 G 194 G 212 G 232 50% 25% unfold. Buy! 25,0 B 95 B 128 B 155 B 185 B 217 CITI, October 2015 20,0 -40% R 87 R 113 R 140 R 171 R 207 -59% Darker Darker 15,0 G 6 G 81 G 115 G 153 G 199 50% 25%

10,0 -66% B 140 B 161 B 180 B 201 B 227

3Q15 results underscore further improvement in revenue dynamics -71% 5,0 and management focus on efficiencies. Final (2015) DPS announced R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 is ~30% above expectations and offsets the negative FX move. Buy! 50% 25% B 0 B 140 B 168 B 196 B 224

Morgan Stanley, October 2015 Corporate Highlights Financialand

MSCI Russia

The results were robust, and the higher than guided dividend was Corporate Highlights Financialand the cherry on top. We also believe MegaFon can maintain its Corporate Highlights Financialand dividend payout next year at the 2015 level. Hold Sberbank, October 2015

OperatingandResultsFinancial Generous interim dividend payout supportive for shares. We

continue to see MegaFon as our preferred exposure to Russian

telecom space, given relatively high shareholder returns (interim

dividends equating ~8% yield before end 2015 and cumulative 3Y Appendix yield of over 30%). Buy! Appendix

J.P. Morgan, October 2015 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 3 nationwide mobile operators What MegaFon?is

• Tele2 lags the Big3 operators in the market share, but launched Russian mobile subscribers market share About What What MegaFon?is its services in Moscow in late October 2015 (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 • Predominantly prepaid market, limited handset subsidies 219 228 230 237 240 238 242 50% 25% 1Q15 B 95 B 128 B 155 B 185 B 217 • Relatively high OIBDA margin (compared to developed markets) R 87 R 113 R 140 R 171 R 207 32,6% Darker Darker on the back of relatively benign competition and regulatory 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% framework B 140 B 161 B 180 B 201 B 227

27,1%

27,1% +0.3 pp 23,7% 28,8% 29,0% 29,2% 29,5% Benign regulatory framework 25,1% 24,3% +0.2 pp R 122 R 136 R 163 R 192 R 222 25,8% 23,9% 23,8% 23,4% 23,6% Darker Darker • Mobile termination rates, rates, and last mile fiber G 181 G 138 G 165 G 194 G 223 Others 50% 25% (1) 17,8% 17,1% 17,6% 18,1% -0.4 pp B 0 B 140 B 168 B 196 B 224 access are not regulated 16,0% 16,2% 15,8% Corporate Highlights Financialand 2010 2011 2012 2013 2014 1Q15 2Q15

• Mobile number portability implemented relatively late in terms of market development(2). In 2014, MegaFon was the main

beneficiary of this process with 35% of total numbers ported in Big 3 mobile revenues 2Q 2015 Big 3 data revenues 2Q 2015 Corporate Highlights Financialand • Local loop unbundling is not implemented Corporate Highlights Financialand +0.1 p.p. +1.2 p.p. Russian market fundamentals 34,0% 39,4% East-Central Russia G7(4)

Europe(3) Financial and OperatingandResultsFinancial GDP (CAGR 2014-2016E real change p.a.) -1.5% 2.9% 1.8% 28,4% 21,8% 37,6% 38,8%

Private consumption (CAGR 2014-2016E -0.4 p.p. -0.7 p.p.

-2.9% 2.4% 1.6%

real change p.a.) +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 (3) - Includes Czech Republic, Hungary, Romania, Bulgaria, Poland, Slovakia Outlook for2014 8 (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 Samara

(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 Q3 2015 – focus on quality

4G/LTE network development MegaFon • MegaFon continues to expand its coverage in existing areas

of presence and improve service quality About R 0 R 0 R 100 R 154 R 203 Darker Darker Saint- • Number of 3G and 4G base stations increased by 8% y-o-y G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% Petersburg to more than 61,500 units as of the end of Q3 2015 B 95 B 128 B 155 B 185 B 217 • More 4G availability: R 87 R 113 R 140 R 171 R 207 Darker Darker Moscow – 75 federal regions G 6 G 81 G 115 G 153 G 199 50% 25% Nizhniy Novgorod B 140 B 161 B 180 B 201 B 227

– 532 cities and towns Samara Rostov-on-Don Khabarovsk (1) R 122 R 136 R 163 R 192 R 222 Chelyabinsk – 14 out of 15 cities with a population over 1m people Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224 Chita 4G/LTE services • LTE-Advanced services providing speeds of 150-300 Mbit/sec are available in 8 cities Federal regions covered by MegaFon 4G / LTE network

• 4G-enabled devices registered on MegaFon network - 7.5m OperatingandResultsFinancial

Cities where LTE-Advanced available Corporate Highlights Financialand units, or +54% y-o-y

Availability of MegaFon 4G services • 4G traffic usage increased by 38% y-o-y

75 68 72 74 74 • Share of 4G traffic in total data traffic – c.40% LTE-roaming

• MegaFon is one of the world’s leaders in LTE-roaming 50% 51% 52% 53% 53% coverage in terms of countries covered

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • In Q3 2015, LTE-roaming coverage extended to 58 countries Appendix with 68 operators 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

Structure of MegaFon distribution network Key points MegaFon

Controlled retail 70% 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 2,079 stores ~ 2,000 stores ~ 4,000 stores and provides MegaFon with access to an attractive base of potential subscribers •

In Q3 2015, MegaFon’s controlled retail network OperatingandResultsFinancial Non-controlled retail 30% 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 Q3 2015, sales of smartphones increased by 21%

Multi-brand electronic stores Federal retail chain y-o-y, and share of 4G devices represents almost Russian Post outlets (dealer agreement) 30% of total sales of data-enabled devices in our Local dealers controlled retail network Other ~ 3,000 stores Appendix Outlook for 2015

11 Note: (*) for the quarter, as of end of Q3 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, m Consolidated Revenue breakdown, RUB bn MegaFon Growth Lower What MegaFon?is ▲ 7.0% 297,2 314,8 ▼ 0.5% About

272,3 What MegaFon?is 68,1 69,7 69,1 73,9 23,1 62,6 18,1 22,2 232,6 231,4 17,9 13,3 20,1 R 0 R 0 R 100 R 154 R 203 16,0 13,3 Darker Darker

G 152 G 179 G 194 G 212 G 232 21,0 25,2 27,7 26,8 28,5 15,9 16,5 50% 25% B 95 B 128 B 155 B 185 B 217 259,0 269,5 241,1 200,8 201,6 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 9M 2014 9M 2015 2012 2013 2014 9M 2014 9M 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 ▲ 26.7% 50% 25% 3 145 B 0 B 140 B 168 B 196 B 224 2 603 Lower Corporate Highlights Financialand 2 482 1 586 ▼ 1.2% 1 068 43,0% 44,6% 44,0% 44,7% 44,4%

164 181 209 208 230 117,1 132,6 138,5 104,1 102,8

Corporate Highlights Financialand Corporate Highlights Financialand 2012 2013 2014 9M 2014 9M 2015 2012 2013 2014 9M 2014 9M 2015

Data ARPU, RUB per month DSU, MB/month % of Revenue Blended ARPU(3) and blended MOU(4) Consolidated Capex and Capex margin Growth

344 OperatingandResultsFinancial 344 334 ▲ 29.2% 17,9% 20,1%

16,6% 15,9% 15,5%

47,1 56,5 46,5

319 326 321 45,2 36,0

2012 2013 2014 2012 2013 2014 9M 2014 9M 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 Q3 and 9M 2015 14

Strategic acquisitions

1 GARS 2 Garden Ring

Transaction Transaction MegaFon • On 18 September, MegaFon acquired 100% of the share capital of GARS • On 9 October, MegaFon completed a transaction to acquire 49.999% of the About Holding Limited (“GARS”), a building local exchange carrier, providing a full share capital of Glanbury Investments Ltd, the owner of CJSC “Sadovoe R 0 R 0 R 100 R 154 R 203 range of fixed-line services to the tenants of class А and Darker Darker Koltso” (“Garden Ring”), and the re-negotiation of the lease for the building G 152 G 179 G 194 G 212 G 232 В business centers 50% 25% signed in 2012 B 95 B 128 B 155 B 185 B 217 Asset Asset R 87 R 113 R 140 R 171 R 207 • Darker Darker GARS is a leading second-tier fixed-line telecommunications services G 6 G 81 G 115 G 153 G 199 50% 25% provider to B2B and B2C clients in Moscow and Saint-Petersburg (Internet, • Garden Ring owns and operates a class A office building at 41 Oruzheyny B 140 B 161 B 180 B 201 B 227

telephony, VPN, lease of dedicated channels, corporate client base exceeds) Lane in the center of Moscow with a total gross leasable area of 115,000 sq meters R 122 R 136 R 163 R 192 R 222 • GARS owns a 900 km-long fiber-optic network, which links more than 200 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% business centers in Moscow and about 100 business centers in Saint- Consideration B 0 B 140 B 168 B 196 B 224 Petersburg • Total consideration of up to US$ 282m: Consideration – US$ 202m paid at the date of acquisition • The fair value of the total consideration is RUB 2.2bn at the date of acquisition: – remaining portion - deferred for up to one year

– Cash consideration of RUB 1.5bn paid at the date of acquisition Rationale Corporate Highlights Financialand – Contingent consideration of US$ 5m payable within eight months from • MegaFon intends to use the Oruzheyny Building as its new corporate the date of acquisition and depending upon satisfaction of certain headquarters, and move to a single location up to 4,000 employees who conditions currently occupy six separate properties in various parts of Moscow, thereby – Deferred consideration of US$ 5m to cover risks is, payable on or prior to reducing overheads and improving communication between various parts of the second anniversary of the acquisition date the Company – Since the contingent and deferred considerations are subject to • Up to US$ 98m in savings on rent for MegaFon over the next 10 years

satisfaction of certain conditions, the final amount of the total consideration may change • Eliminating foreign exchange risk related to MegaFon rental costs

Rationale • Together with MegaFon, Sberbank will be a long-term premier anchor tenant, Appendix • The acquisition is in line with MegaFon’s strategy to develop a “second core” contributing to the attractiveness of the project as a real estate investment business and enhances MegaFon’s position in the B2B fixed-line market in 15 Moscow

Spectrum acquisition

3 SMARTS Rationale for SMARTS acquisition

• Enhancement of MegaFon’s position in 900/1,800 MHz spectrum to MegaFon

Transaction enable: About - Faster and cost-effective LTE 1,800 MHz network development R 0 R 0 R 100 R 154 R 203 • Darker Darker On 14 August, MegaFon acquired additional spectrum in the Samara, - Unloading of over-utilized 2G/3G network and increase of the G 152 G 179 G 194 G 212 G 232 50% 25% Astrakhan and Yaroslavl regions and the Chuvash Republic through the network capacity B 95 B 128 B 155 B 185 B 217 purchase of a 100% interest in four companies from the SMARTS Group • Increase of population coverage R 87 R 113 R 140 R 171 R 207 (“SMARTS”) Darker Darker G 6 G 81 G 115 G 153 G 199 • Ability to serve new subscribers 50% 25% B 140 B 161 B 180 B 201 B 227

Asset • Protection of MegaFon’s revenue and market share in Samara and

Astrakhan R 122 R 136 R 163 R 192 R 222 Spectrum Darker Darker Company Region G 181 G 138 G 165 G 194 G 223 900 MHz 1,800 MHz 50% 25% 4 Participation in frequencies auction B 0 B 140 B 168 B 196 B 224 SMARTS-Samara Samara region 24.3 31.6 • In October, MegaFon participated in the first Russian auction for frequencies conducted by the Federal Service for Supervision of Astrakhan GSM Astrakhan region 24.3 27.2 Communications, Information Technology, and Mass Media of the Russian Federation (Roskomnadzor) and acquired 2 lots for 1,800 MHz Cheboksary -GSM Chuvashia region 19.2 29.6 spectrum band: Corporate Highlights Financialand 1) Republic of Dagestan: 1 lot with a bandwidth of 30.0 MHz for RUB Yaroslavl -GSM Yaroslavl region 16.6 29.6 Total 84.4 118.0 1.06bn 2) Karachay-Cherkess Republic: 1 lot with a bandwidth of 27.6 MHz for RUB 0.2bn Consideration • Total consideration is RUB 1.26bn

• Total consideration is RUB 5.75bn: Rationale – RUB 5.53bn paid at the date of acquisition

• Additional spectrum band will allow MegaFon to further develop both 2G Appendix – RUB 0.22bn payable within six months from the acquisition and 4G networks and optimize costs in these regions

16

Key highlights: positive earnings trend

Growth Lower ▲ 0.3% ▼ 0.5% Revenue, OIBDA and Net profit 231,4 MegaFon 82,2 232,6

81,1 74,0 76,1 81,3 • In Q3 2015, total revenue increased by 0.3% y- About Revenue o-y due to higher wireless (+1.3% y-o-y) and R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 wireline (+9.5% y-o-y) lines, which 50% 25% compensated for lower sales of equipment and B 95 B 128 B 155 B 185 B 217 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015 accessories (-19.5% y-o-y) resulting from the R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 change in sales mix from expensive data- 50% 25% B 140 B 161 B 180 B 201 B 227

Lower Lower enabled devices towards affordable

▼ 3.0% ▼ 1.2% smartphones R 122 R 136 R 163 R 192 R 222 Darker Darker 37,3 34,5 34,7 36,1 104,1 102,8 G 181 G 138 G 165 G 194 G 223 50% 25% 32,0 B 0 B 140 B 168 B 196 B 224 44,4% • OIBDA declined by 3.0% y-o-y mainly due to OIBDA 46,0% 41,9% 43,2% 45,6% 44,5% 44,7% higher sales and marketing, and general and administrative expenses Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015 • As a result of the OIBDA decline, OIBDA margin decreased by 1.5 p.p. y-o-y to 44.5% Corporate Highlights Financialand Growth Lower ▲ 4.0% ▼ 0.6% • Net profit(1) increased by 4.0% y-o-y due to 33,9 33,7 12,8 13,0 13,3 lower foreign exchange losses and gains in derivative financial instruments resulting from (1) 7,4 Net profit 14,6% 14,6% 15,8% 17,1% 16,4% 2,8 10,0% our efficient forex management 3,4%

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015

Quarterly data, RUB bn 9-month data, RUB bn % of Revenue Appendix

17 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

Growth Growth (1)

▲ 81.6% ▲ 29.2% CAPEX , OIBDA-CAPEX, Free Cash Flow MegaFon 46,5 25,9

36,0 About 20,5 • In Q3 2015, MegaFon spent RUB 25.9bn, which is R 0 R 0 R 100 R 154 R 203 CAPEX 14,3 Darker Darker 12,5 20,1% 81.6% higher than in Q3 2014 mainly due to: G 152 G 179 G 194 G 212 G 232 24,9% 8,1 31,9% 15,5% 50% 25% 16,5% B 95 B 128 B 155 B 185 B 217 17,6% 10,9% – RUB 5.8bn purchase of spectrum in Samara, Astrakhan, Yaroslavl regions and the Chuvash R 87 R 113 R 140 R 171 R 207 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9М 2014 9M 2015 Darker Darker G 6 G 81 G 115 G 153 G 199 Republic through the acquisition of a 100% 50% 25% B 140 B 161 B 180 B 201 B 227

Lower Lower interest in four companies of the SMARTS Group ▼ 55.5% ▼ 17.2% R 122 R 136 R 163 R 192 R 222 Darker Darker 68,0 – higher spending on 4G/LTE network roll-out and G 181 G 138 G 165 G 194 G 223 50% 25% 23,0 23,9 22,2 56,3 modernisation of 2G/3G network B 0 B 140 B 168 B 196 B 224 14,0 OIBDA-CAPEX 32,3% 10,2 29,3% 28,4% 29,1% 24,3% • Due to the lower OIBDA and higher CAPEX 17,0% 12,6% spending, OIBDA-CAPEX decreased by 55.5% y-o-y

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015 Corporate Highlights Financialand • Free Cash Flow decreased by 65.1% y-o-y mostly Lower Lower due to higher capex and decreased cash flow from ▼ 65.1% ▼ 25.1% 53,4 operating activities resulting mostly from higher 25,5 40,0 taxes paid as compared to Q3 2014 17,4 19,3 31,4% 11,7 Free Cash Flow 21,1% 25,4% 8,9 15,9% 22,9% 17,3%

10,9%

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015 Appendix

Quarterly data, RUB bn 9-month data, RUB bn % of Revenue

18 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 1.3% y-o-y mainly driven

(RUB bn) Growth by expansion of mobile subscriber base, increase in data MegaFon ▲ 0.3% revenue, higher demand for our value-added services

and increased revenue from roaming services About Handsets 82.2 R 0 R 0 R 100 R 154 R 203 81.1 81.3 Darker Darker and 76.1 Mobile data continued to be the key growth driver and G 152 G 179 G 194 G 212 G 232 accessories 6,2 7,2 74.0 5,0 ▼ 19.5% 50% 25% 4,0 B 95 B 128 B 155 B 185 B 217 Wireline 5,2 6,3 5,7 ▲ 9.5% represented 26.6% of total revenue in Q3 2015 vs. 4,4 5,3 5,5 21.4% in Q3 2014, increasing by 24.6% y-o-y due to: R 87 R 113 R 140 R 171 R 207 Darker Darker G 6 G 81 G 115 G 153 G 199 ― expansion of data user base by 6.2% y-o-y to 29.1 50% 25%

million users as a result of our data user acquisition B 140 B 161 B 180 B 201 B 227

Other wireless 49,0 efforts and higher adoption of data-enabled devices 52,4 51,2 47,4 R 122 R 136 R 163 R 192 R 222 revenue(1) 46,2 (2) Darker Darker (more than 50% of data-enabled devices G 181 G 138 G 165 G 194 G 223 ▲ 1.3% 50% 25% registered on MegaFon network) B 0 B 140 B 168 B 196 B 224

― higher data usage resulting from: • active marketing efforts and intensive 4G network 21,6 Data 17,4 17,5 17,9 19,5 ▲ 24.6% development

• introduction of new offerings to promote higher Corporate Highlights Financialand Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 data usage, including roaming options for subscribers travelling across Russia

Wireless services 86.0% 83.6% 86.7% 87.8% 86.9% Wireline service revenues increased by 9.5% y-o-y due - Data 21.4% 21.3% 24.1% 25.6% 26.6% to expansion of B2B and B2G client base and implementation of new B2O projects due to DREAM Wireline services 6.4% 7.7% 7.4% 7.0% 7.0% development

Handsets and 7.6% 8.7% 5.9% 5.2% 6.1% Sales of handsets and accessories decreased by 19.5% accessories y-o-y as a result of the change in sales mix towards

lower-cost smartphones Appendix Due to rounding, manual calculations for financials and KPIs may differ from those displayed. 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 19 revenues; roaming charges to other wireless operators and other wireless revenues (2) — Include smartphones, tablets, dongles, 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

(million) Total Russia wireless subscribers including

data service users MegaFon

73,9 About 71,4 • Overall subscriber base in Russia increased by 4.8 69,1 69,7 69,5 R 0 R 0 R 100 R 154 R 203 Darker Darker million new subscribers (+7.0% y-o-y) to 73.9 G 152 G 179 G 194 G 212 G 232 50% 25% B 95 B 128 B 155 B 185 B 217 ▲ 6.3% million resulting from: 28,5 28,3 y-o-y 26,8 27,7 27,3 R 87 R 113 R 140 R 171 R 207 - active subscriber acquisition marketing efforts Darker Darker G 6 G 81 G 115 G 153 G 199 and new marketing campaign 50% 25%

B 140 B 161 B 180 B 201 B 227

- upgrade of existing tariffs and introduction of ▲ 7.0% R 122 R 136 R 163 R 192 R 222 Darker Darker y-o-y new services G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224 - new dealer contract with Svyaznoy, which provides access to an additional attractive customer base • Data service user base expanded by 6.3% y-o-y to 28.5 million users accounting for almost 39% of Corporate Highlights Financialand Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 the overall subscriber base • Increase in data service users was achieved due to Data service user base (1) User base not using data service (2) organic growth through initiatives aimed at promoting shift of “pure” voice users to data usage

Share of data users in overall subscriber base, % and increased penetration of data-enabled devices

38.8% 39.7% 39.3% 39.6% 38.6% on MegaFon network now totaling 50.4% Appendix

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (1) — Data Service User is defined as a Subscriber who has used any of our data transfer services within the preceding three months 20 (2) — Mobile subscribers that do not fall within the definition of Data Service User Base Drivers of Russia total wireless services revenues: Results provided on this page cover

DSU and APPMB only the Russian business

DSU(1) & APPMB(2) Data revenue operating statistics

• Strong increase of DSU (+26.0% y-o-y) in Q3 2015 MegaFon Growth Growth ▲ ▲26.7% resulted from:

26.0 % About 3 188 3 074 3 186 3 145 – intensive roll-out of the 4G/LTE network R 0 R 0 R 100 R 154 R 203 2 959 Darker Darker G 152 G 179 G 194 G 212 G 232 2 529 2 482 resulting in a higher share of 4G traffic (almost 50% 25% B 95 B 128 B 155 B 185 B 217 40% of total traffic) R 87 R 113 R 140 R 171 R 207 0,08 0,07 0,07 0,07 0,08 0,08 0,07 – upgrade of tariffs and internet options, Darker Darker G 6 G 81 G 115 G 153 G 199 50% 25% including roaming offerings for subscribers B 140 B 161 B 180 B 201 B 227 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015 travelling across Russia R 122 R 136 R 163 R 192 R 222 – growing penetration of data-enabled devices Darker Darker G 181 G 138 G 165 G 194 G 223 DSU, Mb/month APPMb, RUB 50% 25% on MegaFon network increasing by 8 p.p. y-o-y B 0 B 140 B 168 B 196 B 224 to 50.4% in Q3 2015 (3) DATA ARPU (ARPDU ) – continued increase in 4G-enabled devices registered on MegaFon network reaching 7.5 RUB per Growth Growth

month ▲14.6% ▲10.6% million Corporate Highlights Financialand 244 230 228 • APPMB in Q3 2015 stayed flat y-o-y largely 216 208 213 210 because of a subscriber shift towards more expensive bundled tariffs and options with larger amount of data available • ARPDU in Q3 2015 increased by 14.6% y-o-y due Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 9M 2014 9M 2015

to faster organic growth in data traffic usage on the back of increasing customer demand for larger Quarterly data 9-month data

data packs and active consumption of mobile data Appendix services in roaming due to attractive roaming Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed mobile data propositions (1) — Total number of megabytes transferred during a given period divided by average number of data subscribers during such period, 21 divided by number of months in such 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

Key components Key drivers of OIBDA margin S&M as % of G&A as % of MegaFon Gross profit margin OIBDA 46.0% revenue revenue 44.5% ▼1.5 p.p. • In Q3 2015, OIBDA decreased by 3.0% y-o-y, while margin ▲ 0.4 p.p. ▼ 0.5 p.p ▼ 1.4 p.p. About (%) OIBDA margin declined by 1.5 p.p. y-o-y to 44.5% R 0 R 0 R 100 R 154 R 203 Darker Darker G 152 G 179 G 194 G 212 G 232 50% 25% Lower • The following factors influenced OIBDA: B 95 B 128 B 155 B 185 B 217 ▼ 3.0% - Gross profit increased by 0.8% y-o-y driven by R 87 R 113 R 140 R 171 R 207 Darker Darker 37,3 0,2 0,3 the revenue growth (+0.3% y-o-y) and reduced G 6 G 81 G 115 G 153 G 199 36.2 50% 25% costs of revenues (-1.2% y-o-y). Gross profit B 140 B 161 B 180 B 201 B 227

OIBDA (0.4) (1.2) (RUB bn) margin grew by 0.4 p.p. to 73.8% R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 50% 25% - Sales & marketing expenses increased by B 0 B 140 B 168 B 196 B 224 10.0% y-o-y mainly due to higher advertising expenses relating to a new company positioning campaign and increased dealer commissions as a result of further retail distribution development Corporate Highlights Financialand Gross profit ▲ 0.8% - General & administrative expenses grew by 6.5% due to: – higher rent and utilities expense resulting +0.3% (1.2%) +10.0% +6.5% from our network expansion and general

OIBDA Revenue Cost of revenue Sales & General & OIBDA inflationary pressure; Q3 2014 Marketing Administrative Q3 2015

– higher operating taxes Appendix y-o-y growth y-o-y decrease

Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed. 22

Net debt and liquidity

Net Debt Build-up, in RUB bn As of 31 Dec 2014 As of 30 Sep 2015 Change • Comfortable leverage position despite dividend

payment and M&A activity: MegaFon Cash and cash equivalents 22.2 70.8 48.6

Short-term investments 47.9 3.8 (44.1) - Net debt/LTM OIBDA at 0.9x level at the end About of Q3 2015 R 0 R 0 R 100 R 154 R 203 Darker Darker Total debt 206.3 197.6 (8.7) G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% - MegaFon paid RUB 10bn in dividends in B 95 B 128 B 155 B 185 B 217 Long-term debt 157.6 149.6 (8.0) August 2015 R 87 R 113 R 140 R 171 R 207 Short-term debt 50.2 49.3 (0.9) Darker Darker - SMARTS and GARS transactions completed G 6 G 81 G 115 G 153 G 199 50% 25% Deferred financial cost (1.6) (1.3) (0.3) B 140 B 161 B 180 B 201 B 227

• Continuing optimisation efforts to improve debt Net debt (1) 136.2 123.0 (13.2) profile and FX risk structure: R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 - Signing of a Framework Cooperation 50% 25% B 0 B 140 B 168 B 196 B 224 (1) (2) Agreement with China Development Bank Net debt and Net debt/LTM OIBDA Liquidity split by currency Corporation for potential new financing of up

as of 30 Sep 2015 to US$ 600m in September RUB bn / (x) Lower ▼ 0.14 x - Placement of the RUB 15bn series BO-05 9%

13% OperatingandResultsFinancial

exchange bond at a coupon rate of 11.4% Corporate Highlights Financialand 1,04x 0,98x 0,94x 0,90x 0,82x p.a. for a 2-year period in October • Liquidity structure continues to reflect volatile 140,3 136,2 129,1 113,6 123,0 market conditions: 78% - Most of the liquidity kept in hard currencies

to mitigate FX risks Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 RUB USD HKD - Sufficient liquidity to cater for Garden Ring

Net debt Net debt/LTM OIBDA transaction and a RUB 40bn dividend Appendix

payment in December Outlook for 2015 Note: Due to rounding, manual calculations for financials and KPIs may differ from those displayed (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 23 deposits (2) Liquidity is calculated as the sum of Cash @ cash equivalents and Short-term investments (3) Includes 0.5% of EUR cash

Debt profile

Debt portfolio structure MegaFon By instrument By currency By maturity

• Diversified portfolio currency composition About R 0 R 0 R 100 R 154 R 203 % of total serves as a mitigant of currency risk Darker Darker G 152 G 179 G 194 G 212 G 232 Corporate Highlights Financialand 50% 25% 11% 2% B 95 B 128 B 155 B 185 B 217 18% - Predominant portion of the portfolio is in 26% 25% rubles R 87 R 113 R 140 R 171 R 207 Darker Darker

50% 10% G 6 G 81 G 115 G 153 G 199 2015 - 58% • No short-term refinancing risk 50% 25% 39% B 140 B 161 B 180 B 201 B 227

15% Jun

14% - - >60% of Company’s debt becomes due 30 32% R 122 R 136 R 163 R 192 R 222 Darker Darker within 3Y tenor or longer G 181 G 138 G 165 G 194 G 223 50% 25% B 0 B 140 B 168 B 196 B 224

11% 2%

18%

23% OperatingandResultsFinancial

26% Corporate Highlights Financialand 2015 - 47% 10%

56% Sep - 42% 15%

30 16%

33%

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 24 (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 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 ≥41.5% Revised G 181 G 138 G 165 G 194 G 223 50% 25%

B 0 B 140 B 168 B 196 B 224 Corporate Highlights Financialand

CAPEX ≤ RUB 65bn (1) Reiterate

Appendix

Note: 25 (1) — organic CAPEX, excluding CAPEX on acquisitions

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 26

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

27

…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

28

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 2 400 MHz (LTE) - - - 30 - 70(1)

2 600 MHz 25 25 - - (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

29 (1) Band size varies depending on Russian region (2) 3G only for Moscow, Moscow region and Komsomolsk-on-Amur (3) In 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 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 30

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

TARIFF NAME PRICE FEATURES BEYOND THE PACKAGE

• MegaFon MegaFon - 200 minutes on MegaFon subs in Russia • On MegaFon subs of Moscow region – 0 RUB/min 220 RUB/ month • 1.5 GB of 3G, 4G+ traffic • Other MegaFon subs – 3 RUB/min About Free on All included XS What MegaFon?is R 0 R 0 R 100 R 154 R 203 net calls Darker Darker • 200 minutes G 152 G 179 G 194 G 212 G 232 50% 25% within • On MegaFon subs of Moscow region – 0 RUB/min B 95 B 128 B 155 B 185 B 217 MegaFon - 400 RUB/ month • 3 GB of 3G, 4G+ traffic Moscow All included S • Other MegaFon subs – 2.5 RUB/min region • 200 SMS R 87 R 113 R 140 R 171 R 207 Darker Darker • G 6 G 81 G 115 G 153 G 199 1 free movies and channels on MegaFon TV 50% 25% B 140 B 161 B 180 B 201 B 227

• 400 minutes

• 5 GB of 3G, 4G+ traffic • On MegaFon subs of Moscow region – 0 RUB/min MegaFon - R 122 R 136 R 163 R 192 R 222 700 RUB/ month Darker Darker All included M • 400 SMS • Other MegaFon subs – 2.5 RUB/min G 181 G 138 G 165 G 194 G 223 50% 25% • 2 free movies and channels on MegaFon TV B 0 B 140 B 168 B 196 B 224

• 800 minutes in Russia

Bundledtariffs MegaFon - Free on 1,300 RUB/ month • 8 GB of 3G, 4G+ traffic • On MegaFon subs of Moscow region – 0 RUB/min All included L net calls • 800 SMS • All outgoing calls to other regions of Russia – 2.5

in Russia • Special terms for trips in Russia RUB/min Corporate Highlights Financialand • 4 free movies and channels on MegaFon TV Corporate Highlights Financialand

• 2,500 minutes in Russia • On MegaFon subs of Moscow region – 0 RUB/min MegaFon - 2,700 RUB/ month • 10 GB of 3G, 4G+ traffic All included VIP • All outgoing calls to other regions of Russia – 2.5 • 2,500 SMS RUB/min • 6 free movies and channels on MegaFon TV

• Outgoing call on not MF subs of Moscow

region – 2.5 RUB/ min

• Not applicable Switch to zero 0 RUB/ month

• 9.9 RUB/MB; O RUB if Internet XS is on Appendix • Outgoing call on not MG subs of Moscow Appendix

tariffs region – 1.6 RUB/min • Not applicable Popular Everything is simple 0 RUB/ month • 9.9 RUB/MB; O RUB if Internet XS is on 31

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 • 3 GB of traffic G 152 G 179 G 194 G 212 G 232 50% 25% MegaFon - B 95 B 128 B 155 B 185 B 217 350 RUB/ month • Maximum speed is not limited Internet S • 1 free movies and channels on MegaFon TV • Once a plan data allowance is used, the Internet access will R 87 R 113 R 140 R 171 R 207 Darker Darker • 16 GB of traffic* automatically be suspended until G 6 G 81 G 115 G 153 G 199 50% 25% MegaFon - the next calendar month or until the B 140 B 161 B 180 B 201 B 227

• Maximum speed is not limited plan is upgraded with other options

Internet M 590 RUB/ month • 2 free movies and channels on MegaFon TV R 122 R 136 R 163 R 192 R 222 Darker Darker G 181 G 138 G 165 G 194 G 223 • 36 GB of traffic* 50% 25% B 0 B 140 B 168 B 196 B 224 MegaFon - • Maximum speed is not limited Internet L 890 RUB/ month

• 4 free movies and channels on MegaFon TV Internettariffsoptions • Unlimited amount of traffic** MegaFon - 1,290 RUB/ month • Maximum speed is not limited

Internet XL Corporate Highlights Financialand

• 6 free movies and channels on MegaFon TV 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)

32 (*) 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: [email protected] 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

33