Telenor Wins New York Arbitration against Alfa - Alfa Ordered to Sell Kyivstar Shares or Divest Itself of Competing Assets

Telenor has today won a New York arbitration proceeding against
Alfa Group subsidiary Storm LLC in connection with Storm's violations
of the Shareholders Agreement relating to the parties' joint
investment in Ukrainian mobile operator Kyivstar G.S.M. Among other
things, the arbitration tribunal has ordered Alfa to sell its Kyivstar
shares within 120 days to an unaffiliated entity or divest itself of
its holdings in competing Ukrainian wireless operators Turkcell and
Ukrainian High Technologies above 5%.

The three-member arbitration tribunal today issued an arbitration
award which held that Alfa subsidiary Storm has breached and continues
to breach the Kyivstar Shareholders Agreement by:

-- failing to appoint candidates for election to the Kyivstar
Board and failing to cause Storm-nominated Board members to
attend Board meetings;

-- failing to attend Kyivstar shareholders meetings;

-- owning or controlling, directly or indirectly through
affiliates, more than 5% of the shares of Turkcell and
Ukrainian High Technologies, which are competing wireless
telecom operators in Ukraine; and

-- by failing to settle any and all disputes relating to the
Kyivstar Shareholders Agreement by arbitration.

The tribunal's award orders Alfa subsidiary Storm to (a) organize
its Kyivstar shareholding so that it can nominate four candidates for
election to the Kyivstar Board, (b) take all steps necessary to elect
its candidates to the Kyivstar Board and ensure they attend all future
Kyivstar Board meetings and participate in good faith in the direction
and management of Kyivstar's business, (c) attend all Kyivstar
shareholders meetings, (d) take steps to cause Kyivstar's charter to
be amended to conform to applicable Ukrainian law and the Kyivstar
Shareholders Agreement, and (e) within 120 days, sell its Kyivstar
shares to a person other than a Storm affiliate unless prior to that
time Storm and its affiliates divest their shareholdings in Turkcell
and Ukrainian High Technologies that exceed 5%.

In addition, the tribunal has enjoined Storm and anyone acting in
concert with it from (i) pursuing any litigation in Ukraine relating
in any way to the Kyivstar Shareholders Agreement, including any
existing litigation, (ii) attempting to enforce certain Ukrainian
court orders and (iii) taking any action to prevent Telenor and Ernst
& Young from exercising their rights under the Kyivstar Shareholders
Agreement or other agreements with Kyivstar

Telenor commenced the arbitration proceeding, which is governed by
the UNCITRAL (United Nations Commission on International Trade Law)
arbitration rules, in February 2006. Both Telenor and Alfa had agreed
in the Kyivstar Shareholders Agreement to resolve any disputes in such
an arbitration proceeding.

"We are delighted with this outcome," said Telenor Executive Vice
President and Head of Central and Eastern Europe, Jan Edvard Thygesen.
"Alfa began violating the Kyivstar Shareholders Agreement just over
one year after signing it. Our sole objective in bringing this
proceeding has been to defend our investment in Kyivstar and our
rights under the Shareholders Agreement, force Alfa to comply with the
agreement it signed. We are particularly pleased that the tribunal has
ordered Alfa to divest itself of its interests in competing Ukrainian
mobile operators or sell its shares in Kyivstar within 120 days, and
has ordered Alfa to stop interfering with Kyivstar's ability to have
its financial statements audited by Ernst & Young. The tribunal's
award marks the beginning of the restoration of corporate governance
in Kyivstar."

Telenor also announced it has applied to the United States
District Court for the Southern District of New York to confirm the
arbitration award so that Telenor can begin to enforce it against
Alfa. "We will seek to enforce this award wherever Alfa has assets,
including in Ukraine," said Thygesen. "We are confident Ukraine will
comply with its international treaty obligations and its own laws
concerning enforcement of such arbitration awards."

Telenor is the majority owner of Kyivstar, holding 56.5% of the
shares, while Storm holds a 43.5% interest.