Comstar Direct Added the 400,000th Subscriber.

MOSCOW -- Comstar Direct, the leading provider of broadband Internet access in Moscow under "STREAM" brand and a subsidiary of "COMSTAR - United TeleSystems" JSC ("Comstar") (LSE:CMST), today announced that it has added the 400,000th subscriber to its network.

Irina Terentyeva, a fitness club instructor, signed up for "FEST" tariff plan with unlimited internet access (320 Kbit/s for US$ 15 per month) in the first combined sales and service centre of Comstar UTS.

Ms. Terentyeva was awarded the computer yIRBIS X95e by representatives of Comstar Direct and K-Sistems, the PC manufacturer, in a joint promotion campaign, as well as an IPTV-compatible modem with a prepaid card.

Comstar Direct has delivered robust growth in broadband Internet subscribers since the launch of its service under "STREAM" brand in February 2004. It was first among all operators in the Moscow market to reach 400,000 subscribers target. Comstar Direct has increased its subscriber base by 11% since the end of 2006.

The unique and easy access to broadband internet provided by the unified backbone of MGTS and Comstar Direct is the main factor which contributed to the success of its offering. Comstar Direct has a broad selection of tariff plans in a wide range of pricing and connection speed options for all market segments. It offers a number of add-on services such as VOD, IPTV and gaming in addition to Internet access.

Vladimir Malyavin, General Director of Comstar Direct, commented: "Comstar Direct has delivered robust growth in broadband Internet subscribers since the launch of its service under "STREAM" brand in February 2004. It was the first among all operators in the Moscow market to reach 400,000 subscribers target. The unique offer range and the reliability of service have contributed to our success. We are committed to continuous improvement of our service and product range through the launch of new add-on services and network upgrades in order to meet our customers' requirements and high standards of service in Comstar UTS. I would like to thank each of our 400,000 subscribers for helping us to become the first operator in Russia to reach this milestone."

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

Comstar UTS is the leading combined telecommunications operator in Moscow and the Moscow region, 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 unique last mile access to 98% of Moscow households. The Company also offers communications services in several Russian regions, and CIS and Eastern European countries. Comstar UTS had 3.6 million traditional fixed-line subscribers, over 500,000 alternative operator segment subscribers in Moscow, and almost 100,000 alternative segment subscribers in the Russian regions outside Moscow, as at December 31, 2006. Comstar UTS reported operating revenues of US$ 828 million for the nine months ended September 30, 2006, and had consolidated assets totalling US$ 2.8 billion as at the end of the period. Comstar UTS securities are listed under the symbol "CMST" on the Moscow Stock Exchange and the London Stock Exchange.

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.