Comstar Launches Zonal Network in Khanty-Mansy Region.

MOSCOW -- "COMSTAR - United TeleSystems" JSC ("Comstar") (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that its subsidiary, Tyumenneftegassvyaz ("TNGS"), has launched a zonal telephone network in the Khanty-Mansy Autonomous Region of Russia. TNGS is the second operator in the region following Uralsvyazinform to provide traffic and transit exchange under the new regulations.

Nikolay Tokarev, interim President and CEO of Comstar-UTS, commented: "We see the deployment of the regional zonal licenses as a necessary step in the development of TNGS, which is the largest alternative fixed-line operator in the Khanty-Mansy Autonomous Region, with a 24%1 market share as at the end of 2006. We expect that the launch of zonal network services will contribute an additional 10%-12% to TNGS' overall revenues."

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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$ 1.12 billion for the twelve months ended December 31, 2006, and had consolidated assets totalling US$ 3.54 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.

1 Source - Direct Info (in monetary terms, among alternative operators)