In this annual report, unless the context otherwise requires, the following words and expressions have the following meanings.

"base station" A fixed site with network equipment that is used for radio frequency communications with mobile stations, and is part of a cell, or a sector within a cell, and is connected to an MSC, an MTSO or other part of a mobile telecommunications system
"Board of Directors" The board of directors of the Company
"CDMA" Code Division Multiple Access. A digital wireless transmission technology for use in mobile telephone communications, personal communications services and other mobile communications systems. CDMA is a spread spectrum technology in which calls are assigned a pseudo-random code to encode digital bit streams. The coded signals are then transmitted on a frequency between the end user and a cell site, where a base station processes them. CDMA allows more than one wireless user to simultaneously occupy a single radio frequency band with reduced interference
"CDMA 450" A 3G technology which uses CDMA 2000-1x air interface deployed in the 450 MHz range
"CDMA 2000-1x" A member of the family of 3G mobile telecommunications standards that use CDMA to send voice, data and signalling data between mobile phones and cell sites. It is the second generation of CDMA digital cellular, with double the voice traffic capacity of CDMA
"CDN" Content Delivery Network
"cell site" The entire infrastructure and radio equipment associated with a mobile telecommunications transmitting and receiving station, including the land, building, tower, antennas and electrical equipment
"channel" A single path, either radio frequency or voice, for transmitting electrical signals
"CIS" Commonwealth of Independent States
"CJSC" Russian closed joint stock company
"Director(s)" Member(s) of the Company's Board of Directors
"DLD" Domestic long-distance
"DSL" Digital subscriber line
"EDGE" Enhanced Data Rates for Global Evolution. An advanced technology that allows subscribers to connect to the Internet and send and receive data, including digital images, web pages and photographs, up to three times faster than an ordinary GSM/GPRS network
"FAS" Federal Antimonopoly Service and its predecessors
"FASPM" Federal Agency for State Property Management
"frequency" The number of cycles per second, measured in hertz, of a periodic oscillation or wave in radio propagation
"FSFM" Federal Service for Financial Markets and its predecessors
"FTTx" Fibre to the building or fibre to the home
"FST" Federal Service for Tariffs and its predecessors
"GlobalTel" CJSC Globalstar - Spase Telecommunications
"GPRS" General Packet Radio Services. A technology standard for high speed data transmission over GSM networks
"GSM" Global System for Mobile Communications. A standard for digital mobile telephone transmissions in the frequency bands of 900 MHz, 1800 MHz and 1900 MHz
"GSM-900" A GSM network in the 900 MHz frequency range
"GSM-1800" A GSM network in the 1800 MHz frequency range
"HSPA" High Speed Packet Access. A collection of mobile telephony protocols that extend and improve the performance of existing UMTS protocols
"IFRS" International Financial Reporting Standards
"ILD" International long-distance
"infrastructure" Fixed infrastructure equipment consisting of base stations, base station controllers, antennas, switches, management information systems and other equipment that receives, transmits and processes signals from and to subscriber equipment and/or between mobile telecommunications systems and the public switched telephone network
"interconnect" Any variety of hardware arrangements that permit the connection of telecommunications equipment to a communications common carrier network such as a public switched telephone network
"IP" Internet Protocol. A data-oriented protocol used for communicating data across a packet-switched network
"IP telephony" Internet Protocol telephony. The routing of voice conversations over the Internet or any other IP-based network. The voice data flows over a general-purpose packet-switched network, instead of traditional dedicated, circuit-switched telephony transmission lines
"IP TV" Internet Protocol television
"IRCs" OJSC SibirTelecom, OJSC CenterTelecom, OJSC Dalsvyaz, OJSC VolgaTelecom, OJSC NorthWest Telecom, OJSC Uralsvyazinform and OJSC Southern Telecommunication Company, former interregional telecommunications companies that were merged into the Company on 1 April 2011
"iru" Indefeasible Rights of Use
"Joint stock Companies Federal Law of the Russian Federation NQ 208-FZ "On Joint Stock Companies" of
Law" 26 December 1995, as amended
"Labour Code" Labour Code of the Russian Federation N 197-FZ of 30 December 2001, as amended
"LLc" Russian limited liability company
"LTE" Long-term evolution, the latest standard in the mobile network technology tree that produced the GSM/EDGE and UMTS/HSPA network technologies.
"Management Board" The management board of the Company
"MegaFon" JSC MegaFon
"MGTS" OJSC MGTS, or the Moscow City Telephone Network
"MTS" Mobile TeleSystems OJSC
"MHz" Megahertz. A unit of measure of frequency; 1 MHz is equal to one million cycles per second
"MICEX" Moscow Interbank Currency Exchange, a regulated stock exchange in Russia
"microwave" Electromagnetic waves in radio frequencies above 890 MHz and below 20 GHz
"MOBITEL" LLC MOBITEL, our 99.9% subsidiary
"network equipment" The fixed infrastructure consisting of base stations, base station controllers, mobile switching centres and related information processing control points that manages communications between the mobile unit and the public switched telephone network
"Notice" The 75-day prior written notice to be provided by VEB to Svyazinvest in connection with a sale
of the Ordinary Shares pursuant to the Shareholders' Agreement
"NTK" OJSC National Telecommunications
"OJSC" Russian open joint stock company
"PoP" Point of presence; a physical location where two or more types of communications devices establish a connection [e.g., Internet access points, the connection facility between a fixed line long distance network and the local telephone network)
"RAS" Russian accounting standards
"Reorganisation" The merger of the IRCs and Dagsvyazinform into the Company completed on April 1, 2011
"RTS" "Russian Trading System" Stock Exchange, a regulated stock exchange in Russia
"SaaS" Software as a Service
"Securities Market Law" The Federal Law N 39-FZ "On the Securities Markets" of April 22, 1996, as amended
"Shareholders' Agreement" The shareholders' agreement entered into by Svyazinvest and VEB on June 25, 2010
"Skartel" LLC Skartel
"Sky Link" CJSC Sky Link
"spectrum" The range of electromagnetic frequencies available for use
"Svyazinvest" Svyazinvest Telecommunication Investment Joint-Stock Company
"switch" The switch completes a call by connecting it to the wireline telephone network or another mobile telephone unit. Incoming calls are received by the switch, which instructs the appropriate cell to complete the communications link by radio signal between the cell's transmitter-receiver and the mobile telephone. The switch also records information on system usage and subscriber statistics
"telephony" The process of converting sounds into electrical impulses for transmission over a connecting medium such as wires, fibre optics or microwave
"UMTS" Universal Mobile Telecommunications Services. UMTS is a type of 3G mobile telecommunications technology. It is a multi-function mobile system with wideband multimedia capabilities as well as present narrowband capabilities. UMTS will probably consist of a family of interworking networks, delivering the same new and innovative personal communication services to users regardless of used networks
"VAT" Value added tax, which is applied [and was applied during the Track Record Period) at the rate of 18%
"VEB" Bank for Development and Foreign Economic Affairs (Vnesheconombank) State Corporation
"VEB Directors" The members of the Board of Directors elected from the list of candidates proposed by VEB
"VimpelCom" OJSC "Vimpel-Communications"
"VoIP" Voice over Internet Protocol. A protocol optimized for the transmission of voice through the Internet or other packet switched networks
"VPN" Virtual Private Network
"xDSL" Digital subscriber line technologies. Digital data transmission over local telephone networks
"3G" Third generation wireless, the next generation of wireless communications. 3G wireless technologies allow for much higher transmission rates to wireless communications devices
"4G" Fourth generation wireless, successor to the 3G standard. 4G wireless technologies allow for much higher transmission rates to wireless communications devices compared to 3G