Comstar Builds Multi-Service NGN Network in Ukraine.

MOSCOW -- "COMSTAR - United TeleSystems" JSC ("Comstar" or "the Company") (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that it has signed an agreement with Cisco for the delivery of equipment to build NGN multi-service network in Ukraine. Kvazar Mikro, a subsidiary of SITRONICS, will act as a subcontractor for the installation and launch of the network.

Comstar completed the tender for the delivery of equipment to build and modernize the backbone transportation network in Ukraine and city multi-service communications networks in Kiev and Odessa in December 2007. Comstar plans to install Cisco hub router and backbone router and also aggregation and network management equipment. The project is expected to be launched in the second quarter of 2008.

The backbone network equipment will be installed in service centres in Kiev and Odessa, and will join both networks. Other cities will be added to the backbone infrastructure in the future.

Comstar plans to provide its private clients with Triple Play services and its corporate clients with virtual private networks, telephony, high speed broadband, based on multi-service city networks. The number of subscribers is expected to exceed 125,000 by 2011 in Kiev and Odessa.

Alexander Kirillov, Vice President for Technologies of Comstar UTS, commented: "NGN technology will allow us to improve the quality of our services, introduce new products and enable our clients to manage them. The signing of the agreement for the delivery of NGN equipment is an important step for Comstar in building the new generation network in Ukraine. We plan to integrate all future networks in Ukrainian cities where we intend to offer telecom services, into Comstar's unified NGN Network."

For further information, please visit www.comstar-uts.com.

Comstar UTS is the leading fixed-line telecommunications company in Moscow, both in terms of revenues and subscribers. Comstar UTS provides voice, data, Internet, pay-TV and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and exclusive last mile access to 98% of Moscow households. The Company also offers communications services in five Russian regions and certain CIS countries. Comstar had 3.6 million residential subscribers in Moscow, 452,600 broadband internet subscribers in Moscow, 108,600 corporate subscribers in Moscow, and approximately 94,100 regional and international subscribers, as at September 30, 2007. Comstar UTS reported operating revenues of US$ 1,080 million and a 43% OIBDA margin for the nine months ended September 30, 2007. Comstar GDRs are listed under the symbol "CMST" on the London Stock Exchange.

Comstar-Ukraine is a subsidiary of Comstar UTS. Comstar owns 99% of shares and MGTS - the remaining 1%. Currently Comstar-Ukraine owns 100% of Technological Systems CJSC (Kiev) and Global Digital Telecommunications LLC (Kiev). Comstar-Ukraine provides voice, data and Internet services to residential and corporate clients in Kiev and Odessa. Comstar plans to provide pay-TV and other additional services using WiMAX technology in the future.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Comstar UTS. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might", the negative of such terms or other similar expressions. Comstar UTS wishes to caution that these statements are only predictions, and that actual events or results may differ materially. Comstar UTS does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Comstar UTS, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries Comstar UTS operates in, as well as many other risks specifically related to Comstar UTS and its operations.