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28 May 1999

VimpelCom announces closing of Telenor transaction

Total transaction valued at over $162 million

Moscow and New York (May 28, 1999) - Open Joint Stock Company "Vimpel-Communications” ("VimpelCom” or the "Company”) (NYSE: VIP) today announced the closing of the transaction involving Telenor East Invest AS’s ("Telenor”) purchase of a strategic ownership interest in the Company.

On December 1, 1998, the Company and Telenor announced that they had reached an agreement whereby Telenor would purchase a strategic ownership interest in the Company, subject to ” approval by VimpelCom’s shareholders and various Russian regulatory approvals and other customary closing conditions. The transaction was overwhelmingly approved on January 29, 1999, at VimpelCom’s extraordinary general meeting of shareholders and at such time, three Telenor executives were elected to the nine member VimpelCom Board of Directors. Since December 1, 1998, the Company and Telenor have received approvals from the Central Bank of Russia, the Ministry for Anti-Monopoly Policy and Support for Entrepreneurship of the Russian Federation and the Russian Federation Federal Commission on Securities Market. Today, the Company and Telenor completed the transaction.

Under the terms of the transaction signed on December 1, 1998, Telenor is to acquire 8,902,201 newly issued shares of VimpelCom common stock at a purchase price of $18.19 per share ($13.64 per ADS), plus interest accruing from the date of VimpelCom’s shareholder approval on January 29, 1999. Today, the first installments of the purchase price were released to VimpelCom. The remainder of the purchase price will be paid to VimpelCom over the next eight months. Telenor’s ownership interest represents approximately 25.7% of VimpelCom’s total voting capital stock (approximately 31.6% of VimpelCom’s common stock).

Commenting on today’s announcement, Dmitri B. Zimin, President and Chief Executive Officer said, "Today is an historic day for our Company and an important event for telecommunications in Russia. Our alliance with Telenor significantly strengthens our competitive position, providing us with new investment capital at a time when it is difficult to attract new investments in Russia. This investment will facilitate the continuation of the build out of our Moscow GSM licenses, enable us to make opportunistic acquisitions, develop an Internet business, further develop our fiber optic network and begin the evolutionary development of our regional GSM licenses. This transaction also provides us with access to the experience of one of Europe’s leading telecommunications companies.”

Zimin continued, "Telenor is an excellent strategic partner for VimpelCom due to its mass market expertise, success in developing Norway into one of the world’s most penetrated cellular markets and extensive European operations. Telenor is also highly experienced in the Russian telecommunications marketplace. We believe that the combined expertise of the alliance will provide VimpelCom with the competitive advantage necessary to maintain its position as a leading telecommunications group in Russia and the CIS. Our alliance is further strengthened by the proposed merger between Telenor and Telia, the leading Swedish telecommunications company, which will create one of the largest telecommunications groups in Northern Europe. We consider this to be a favorable development which will provide our Company with access to an even larger telecommunications group, thus increasing opportunities for expanded cooperation.”

Telenor is a provider of fixed, mobile, satellite and Internet services and is headquartered in Oslo, Norway. Telenor operates GSM mobile networks in Norway, Germany, Ireland, Greece, Austria, Hungary, Montenegro, Russia, Ukraine and Bangladesh. The current Telenor mobile subscriber base in Norway numbers approximately 1.7 million, a 75% market share in one of the world's most heavily penetrated mobile markets, where the penetration rate is approximately 50%. Telenor's satellite based telephony operations are amongst the largest in the world. Telenor is a co-owner of the INTELSAT, EUTELSAT and INMARSAT satellite organizations. Telenor is also the largest distributor of TV programs to the Scandinavian market.

VimpelCom is a leading provider of cellular telecommunications in Russia, marketing its services under the brand name "Bee Line”. The VimpelCom Group operates GSM-900/1800 and Digital-AMPS cellular networks in the Moscow License Area, which includes the City of Moscow and the Moscow Region. The VimpelCom Group holds cellular licenses covering a total population of approximately 100 million (70% of Russia's population). VimpelCom was the first Russian Company listed on the New York Stock Exchange (November 1996), and its ADSs trade under the symbol "VIP”.

This press release contains forward-looking statements related to the development of the Company's business. These statements are based on Management's best assessment of future market conditions and trends. The actual outcome may differ from these statements as a result of unforeseen developments from competition, governmental regulations of the wireless telecommunications industry, general political uncertainties in Russia and general economic developments in Russia, all of which may be aggravated by the current economic and political crisis. No assurance can be given that the economic crisis will abate in the foreseeable future or that the full impact of the economic crisis on the VimpelCom Group can be assessed at this time. As a result of such uncertainties, there can be no assurance that current or future changes in the political, economic and social environment or current or future regulation of the Russian telecommunications industry will not have a material adverse effect on the VimpelCom Group. 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:
Valery Goldin
VimpelCom (Moscow)
7(095) 974-5888

Glenn Wiener
Edelman Financial Worldwide
1 (212) 704 8174