The company said Tuesday the decision is connected to what it says is the unlawful prosecution of four employees at the subsidiary, Uzdunrobita, on charges of embezzlement and tax evasion.
The case will further sour the investor climate in a country that has seen multiple state-led seizures of businesses.
Uzdunrobita's assets are estimated to be worth around $700 million. MTS says it will pursue international legal action seeking damages.
Uzdunrobita suspended operations in mid-July at the request of Uzbek authorities, depriving around 9.5 million customers of service.