VimpelCom announces fourth quarter and annual 2005 financial and operating results
18 Apr 2006

-- 52% year-on-year increase in total operating revenues --
-- 76% year-on-year increase in net income --
-- 53% year-on-year increase in OIBDA --
-- approximately 48.5 million subscribers as of today
including 3.4 million subscribers in the CIS outside of Russia --

Moscow and New York (April 18, 2006) - Open Joint Stock Company "Vimpel-Communications" ("VimpelCom" or the "Company") (NYSE: VIP), a leading provider of wireless telecommunications services in Russia and Kazakhstan, with newly acquired operations in Ukraine, Uzbekistan and Tajikistan, today announced its financial and operating results for the fourth quarter of 2005 and year ended December 31, 2005.

During the fourth quarter of 2005 the Company continued its rapid growth, improving financial results and establishing a platform for successful operations going forward. VimpelCom's consolidated financial statements are attached.

Commenting on today's announcement, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, "2005 was another great year for VimpelCom. The Company again saw strong revenue growth in excess of 50%, leading to over $3 billion turnover, record OIBDA margin of 49% and 76% growth in net income. We passed the 45 million subscriber mark by adding a record 19 million customers last year.

During 2005 we went through a major realignment of our strategy in Russia, focusing much more on revenue growth and enhancing value of the existing subscriber base. To that end, restaging of our Beeline brand and non-price driven marketing strategy were important elements in achieving our positive results last year. Strong marketing strategy, excellence in execution and a relentless focus on efficiency, are the cornerstones for our future growth in Russia."

Mr. Izosimov concluded, "In 2005 we also continued with our CIS expansion strategy and entered the extremely important market of Ukraine as well as Tajikistan. Presence in these markets, combined with our expanding operations in Kazakhstan and recent entry into Uzbekistan, brings our total license footprint to approximately 232 million people and creates a further growth opportunity."

The principal results of operations with comments are presented in the following tables. All definitions are presented in Attachment A. The condensed consolidated financial statements of VimpelCom are presented in Attachment B. Reconciliation of each of OIBDA, OIBDA margin, ARPU and SAC to the most directly comparable U.S. GAAP financial measures appear in Attachment C.

As discussed in the Company's Annual Report on Form 20-F for the year ended December 31, 2004 and our subsequent quarterly earnings releases, the Company restated its historical financial statements for periods ending on and prior to September 30, 2004 to reflect guidance from the United States Securities and Exchange Commission contained in a letter to the accounting industry in February 2005 with respect to accounting for depreciation of leasehold improvements. In addition, starting with the first quarter of 2005 our earnings releases reflect changes made by the Company to the estimated useful life of its GSM Russian telecommunications licenses as well as a reclassification of revenues generated by the Company's value added services. In its subscriber reporting, starting with the second quarter of 2005, the Company decided to combine its advance payment subscribers with its prepaid subscribers (see "Definitions"). The earlier reported financial statement information and subscriber information that is incorporated in this press release, including for the fourth quarter and full year 2004, were recalculated accordingly.

Key Subscriber Statistics

The overall subscriber growth in 2005 - approximately 19 million new additions - was the highest ever recorded by the Company. On a percentage basis, growth was lower than a year ago - 70.9% in 2005 vs. 132.4% in 2004 - which is natural given the high penetration rate in Russia and our very large subscriber base.

Based on independent research, VimpelCom estimates its subscriber market share in Russia at 34.3% at the end of 2005, compared to an estimated 34.6% at the end of 2004. Based on information released by its competitor in Kazakhstan, VimpelCom's subsidiary KaR-Tel estimates its subscriber market share in Kazakhstan at 37.2% at the end of 2005 as compared with 31.8% estimated at the end of 2004.

The annual churn rate in the past two years was stable at approximately 30% (30.4% in 2005 and 29.6% in 2004). As the Russian marketplace continues to mature and the Company shifts its focus from customer acquisition to customer loyalty and qualitative improvement of its subscriber base, a targeted retention of high-value subscribers is one of VimpelCom's key priorities.

Key Consolidated Financial and Operating Indicators

Significant improvements in VimpelCom's financial and operating results in the fourth quarter and full year 2005, as compared with the fourth quarter and full year 2004, were achieved largely as a result of continued subscriber growth combined with the effects of economies of scale, stable ARPU in the course of 2005 and efficient cost control. A positive effect also came from the Company's continued efforts to enhance the quality of its subscriber base. In the fourth quarter of 2005 we recorded a 2.3% increase in total operating revenues compared with the third quarter of 2005 in spite of the seasonal decline in usage and roaming revenue.

The fourth quarter of 2005 was considered by the market as the last quarter of rapid subscriber growth in Russia. In order to use this opportunity and attract valuable subscribers, the Company increased its investments in dealer commissions and advertising but avoided large-scale price-based promotions. Such actions helped lead to large subscriber growth in the fourth quarter of 2005, second only to the fourth quarter of 2004. Consequently, we experienced an increase in total subscriber acquisition expenses and a decline in OIBDA, net income and the corresponding margins for the fourth quarter of 2005 as compared with the third quarter of 2005. However, this seasonal deterioration in margins in the fourth quarter of 2005 was less pronounced than in the fourth quarter of 2004 due to the above mentioned factors.

SAC remains low as the Company does not subsidize handsets. During 2005 SAC varied in the range between $11 and $14, while the average 2005 SAC of $13.1 was slightly lower than the $13.9 reported for 2004.

Selling, general and administrative expenses ("SG&A") for the year 2005, as a percentage of total operating revenues, improved slightly to 33.8%, as compared with the 34.1% reported for 2004, notwithstanding an additional expense related to the introduction of the universal service fund (USF) in May 2005. SG&A in the fourth quarter of 2005, as a percentage of total operating revenues, was 36.9%, similar to figures reported for the fourth quarters of 2004 and 2003. In absolute numbers, SG&A for the year 2005 increased as compared with the previous year primarily due to a substantially higher sales volume. In addition to this, revenue growth and business expansion in 2005 caused an increase in network maintenance costs connected with further network development.

The 2005 ARPU was $7.5, a 25.7% decline from $10.1 reported for 2004. However, the bulk of this decline appeared in the first quarter of 2005 when ARPU declined $1.7, from $9.0 in the fourth quarter of 2004 to $7.3 in the first quarter of 2005. This decline came as a residual effect of the December 2004 promotional campaign. On the other hand, the decline in ARPU between the first quarter of 2005 ($7.3) and the fourth quarter of 2005 ($7.1) was the lowest ever recorded by the Company, which can be considered as a positive development.

In 2005, VimpelCom's capital investments for purchase of property and equipment totaled $1,635.3 million. $314.5 million was spent on acquisitions of new entities.

The Company's management will discuss its fourth quarter and annual 2005 results during a conference call and slide presentation on April 18, 2006 at 6:30 pm Moscow time (10:30 am ET in New York). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com. The conference call replay and the slide presentation webcast will be available through April 25, 2006 and May 18, 2006, respectively. The slide presentation will also be available for download on VimpelCom's website http://www.vimpelcom.com.

VimpelCom is a leading international provider of mobile telecommunications services in Russia and Kazakhstan, with newly acquired operations in Ukraine, Tajikistan and Uzbekistan. The VimpelCom Group's license portfolio covers approximately 232 million people. Geographically it covers 78 regions in Russia (with 136.5 million people, representing 94% of Russia's population) as well as the entire territories of Kazakhstan, Ukraine, Tajikistan and Uzbekistan. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange ("NYSE"). VimpelCom's ADSs are listed on the NYSE under the symbol "VIP".

This press release contains "forward-looking statements", as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the Company's strategic and development plans and developments in the telecommunications market. These and other forward-looking statements are based on management's best assessment of the Company's strategic and financial position and of future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of unforeseen developments from competition, governmental regulation of the wireless telecommunications industries in Russia and the CIS, general political uncertainties in Russia and the CIS and general economic developments in Russia and the CIS, the Company's ability to continue to grow its overall subscriber base, continued volatility in the world economy and other factors. As a result of such risks and uncertainties, there can be no assurance that the effects of competition or current or future changes in the political, economic and social environment or current or future regulation of the Russian and CIS telecommunications industries will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2004 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments.

For more information, please contact:

VimpelCom

Altimo, a leading private equity group, operating on some of the world's most desirable and potentially lucrative mobile telecommunications markets, was created in 2005 from Alfa Telecom, which itself was established in 2004 to hold the telecoms investments of the Alfa Group Consortium (Golden Telecom, Inc., Turkcell Iletisim Hizmetleri A.S., Kyivstar GSM, MegaFon, VimpelCom, Sky Mobile). Those assets are in Russia, the CIS and other promising emerging markets.

VimpelCom consists of telecommunications operators providing voice and data services through a range of wireless, fixed and broadband technologies. The Group includes companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia and Armenia, in territories with a total population of about 340 million. The Group companies provide services under the "Beeline" brand.  VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (under the symbol "VIP").  In Q1 2008, VimpelCom acquired 100% of the oustanding share capital of Golden Telecom, a leading facilities-based provider of integrated telecommunications and Internet services in Russia and the CIS.

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