13. Impact of Year 2000 (Unaudited)

The Year 2000 issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of VimpelCom's computer programs that have time-sensitive software which is not "Year 2000 Compliant" may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including, among other things, a temporary inability to process billing transactions or engage in normal business activities.

There can be no assurance that VimpelCom will be completely successful in its efforts to address Year 2000 issues. If some of VimpelCom's products and services are not Year 2000 compliant, VimpelCom could suffer lost sales or other negative consequences, including, but not limited to, diversion of resources, damage to its reputation, increased service costs and litigation, any of which could materially adversely affect VimpelCom's business operations or financial statements.

VimpelCom is also dependent on third parties such as its suppliers, service providers and other business partners. If these or other third parties fail to adequately address Year 2000 issues, VimpelCom could experience a negative impact on its business operations or financial statements. VimpelCom has initiated formal communications with its significant suppliers to determine the extent to which it is vulnerable to those third parties' failure to remedy their own Year 2000 compliance issues. In particular, it is unclear as to the extent that the Russian government and other organizations who provide significant infrastructure services within the Russian Federation have addressed the Year 2000 issue. Furthermore, the current crisis discussed in Note 1 could adversely affect the ability of the government and such organizations to fund adequate Year 2000 compliance programs. There is no guarantee that the systems of the government or of other organizations on which VimpelCom relies will be timely converted and would not have an adverse effect on VimpelCom and its systems.

VimpelCom has completed an assessment and will have to test and possibly modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter. The total cost of testing and modification or replacement, which will be funded from operations, is not expected to be material.

The project is expected to be completed in June 1999, which is prior to any anticipated impact on VimpelCom's operating systems. Management believes that, with modifications to existing software and conversions to new software, the Year 2000 issue will not pose significant operational problems for its computer systems. If, however, such modifications and conversions are not made, or are not completed timely, the Year 2000 issue could have a material impact on VimpelCom's operations.

Although VimpelCom has not developed comprehensive contingency or liquidity plans to address situations that may result if VimpelCom or any of the third parties upon which it is dependent is unable to achieve Year 2000 readiness, VimpelCom's Year 2000 compliance program will be ongoing and its ultimate scope, as well as the consideration of contingency plans, will continue to be evaluated as new information becomes available.

The costs of the project and the date on which VimpelCom believes it will complete the Year 2000 modifications are based on management's best estimates, which were derived using numerous assumptions of future events, including the continued availability of certain resources and other factors. There can be no guarantee, however, that these estimates will be achieved and actual results may differ materially from those anticipated. The accompanying consolidated financial statements as of December 31, 1998 and 1997 and for the three years in the period ended December 31, 1998 do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts or classifications of liabilities that may result from the outcome of this uncertainty.