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

lost their CBR licenses. The Russian Government has provided liquidity to the banking system and interest rates havebeen decreasing since the second half of 2009, but major banks are still unwilling or unable to transfer money to theeconomy in the form of long-term loans. A prolonged or serious banking crisis or the bankruptcy of a number of banks,including banks in which we receive or hold our funds, could materially adversely affect our business and our ability tocomplete banking transactions in Russia.The banking and financial systems in the CIS are even less developed than in Russia and may be moresusceptible to the current economic downturn. Few international banks have subsidiaries in Kazakhstan,Uzbekistan, Ukraine and Armenia, and no international banks operate subsidiaries in Tajikistan and Georgia.We have attempted to mitigate our banking risk by receiving and holding funds with the most creditworthy banksavailable in each country. However, in the event of a banking crisis in any of these countries or the bankruptcy orinsolvency of the banks from which we receive, or with which we hold, our funds could result in the loss of ourdeposits or negatively affect our ability to complete banking transactions in these countries, which could have amaterial adverse effect on our business, financial conditions and results of operations.Information that we have obtained from third party sources may be unreliable.We have sourced certain information contained in this prospectus from third parties, including privatecompanies and governmental agencies, and we have relied on the accuracy of this information without independentverification. The official data published by governmental agencies in Russia and the CIS is substantially lesscomplete and less reliable than similar data in the United States and Western Europe. We cannot be certain that theinformation that we obtained from government and other sources and included in this document is reliable. Whenreading this prospectus, you should keep in mind that the data and statistics that we have included relating to Russiaand the CIS could be incomplete or erroneous. In addition, because there is limited reliable data and no currentofficial data regarding the relevant telecommunications markets, including our competitors, we have relied, withoutindependent verification, on certain publicly available information. This includes press releases and filings underthe U.S. securities laws, as well as information from various private publications, some or all of which could bebased on estimates or unreliable sources.Risks Related to the Social Environment in Russia and the CISSocial instability in Russia and the CIS could lead to increased support for centralized authority and a rise innationalism, which could harm our business.Social instability in Russia and the CIS, coupled with difficult economic conditions, could lead to increasedsupport for centralized authority and a rise in nationalism. These sentiments could lead to restrictions on foreignownership of companies in the telecommunications industry or large-scale nationalization or expropriation offoreign-owned assets or businesses. There is relatively little experience in enforcing legislation enacted to protectprivate property against nationalization or expropriation. As a result, we may not be able to obtain proper redress inthe courts, and we may not receive adequate compensation if in the future the Russian, Ukrainian, Kazakh, Tajik,Uzbek, Georgian or Armenian governments decide to nationalize or expropriate some or all of our assets. If thisoccurs, our business could be harmed.In addition, ethnic, religious, historical and other divisions have, on occasion, given rise to tensions and, incertain cases, military conflict. The spread of violence, or its intensification, could have significant politicalconsequences, including the imposition of a state of emergency in some parts or throughout Russia and the CIS.These events could materially adversely affect the investment environment in Russia and the CIS.Risks Related to the Legal and Regulatory Environment in Russia and the CISWe operate in an uncertain regulatory environment, which could cause compliance to become morecomplicated, burdensome and expensive and could result in our operating without all of the requiredpermissions.Although the Communications Law regarding license renewals in Russia has been clarified, the licensingprocedures, including obtaining new frequencies and numbering capacity and the consequences of non-complianceremains unclear.41