(1) qibs that are qps (each as defined below) or (2

Risks Related to Our Operations in Russia and the CISInvestors in emerging markets, such as Russia and the CIS, are subject to greater risks than investors in moredeveloped markets, including significant political, legal and economic risks and risks related to fluctuationsin the global economy.Investors in emerging markets should be aware that these markets are subject to greater risks than moredeveloped markets, including in some cases significant political, legal and economic risks. Emerging marketgovernments and judiciaries often exercise broad, unchecked discretion and are susceptible to abuse and corruption.Emerging economies are subject to rapid change and the information set out herein may become outdated relativelyquickly. The economies of Russia and the CIS, like other emerging economies, are vulnerable to market downturnsand economic slowdowns elsewhere in the world. As has happened in the past, financial problems or an increase inthe perceived risks associated with investing in emerging economies could dampen foreign investment in thesemarkets and materially adversely affect their economies. These developments could severely limit our access tocapital and could materially adversely affect the purchasing power of our subscribers and, consequently, ourbusiness. Generally, investment in emerging markets is only suitable for sophisticated investors who fullyappreciate the significance of the risks involved and investors are urged to consult with their own legal,financial and tax advisors.We face a number of economic, political, social and regulatory risks relating to conducting business outside ofRussia.Although a significant number of our risk factors relate to the risks associated with conducting business inRussia, where a majority of our assets and operations are located, similar risks in each instance also apply to theconduct of our business and operations in Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia, Armenia,Cambodia and Vietnam. In some instances, the risks inherent in transacting business in these countries may bemore acute than those in Russia. Prior to our acquisitions in Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia,Armenia, Cambodia and Vietnam, our company did not have any experience operating in these countries.Regulatory risks present in these countries and in any other countries where we may acquire additionaloperations may not be similar to those we face in Russia and may increase our vulnerability to such risks. Ifany of these risks materialize, our business could be materially adversely affected.The limited history of mobile telecommunications services in the CIS and our limited operating history in theCIS create additional business risks.Mobile telecommunications services are relatively new in the CIS, which have generally experienced slowereconomic growth over the past decade than Russia. As the mobile telecommunications services industry develops inthese areas, changes in market conditions could make our development of services less attractive or no longercommercially feasible. A reduction in our viable development opportunities could have a material adverse effect onour business. In addition, we have a limited operating history providing mobile telecommunications services in theCIS. Consequently, we are subject to the risks associated with entering into any new product line. Our failure toproperly manage those risks could have a material adverse effect on our business.Risks Related to the Political Environment in Russia and the CISIf political and economic relations between Russia and the other countries of the CIS deteriorate, ouroperations in the CIS could be materially adversely affected.Political and economic relations between Russia and the other countries of the CIS are complex and recentconflicts have arisen between the government of Russia and the governments of some of the countries of the CIS.For example, the relationship between Russia and Ukraine has been historically strained due to, among other things,Ukraine’s failure to pay arrears relating to the supply of energy resources, Russia’s introduction of an 18.0% valueadded tax on Ukrainian imports and provocative statements by some politicians. The relationship between Russiaand Georgia has also been strained due to several ongoing disputes which resulted in military conflict in August2008 and may lead to military and/or economic conflict in the future. Although our company operates in the CISthrough local subsidiaries, governmental officials and consumers may associate our group and our brand with39