Comstar UTS: Call Option Exercised.

MOSCOW -- "COMSTAR - United TeleSystems" JSC ("Comstar" or "the Company") (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that Access Telecommunications Cooperatief U.A. (previously known as 2711 Centerville Cooperatief U.A.) has initiated the process of exercising its call option to purchase 46,232,000 Comstar shares from MGTS Finance S.A. for US$ 6.97 per share and a total cash consideration of US$ 322.2 million. The shares to be purchased represent 11.06% of the total number of issued and outstanding Comstar shares. The transaction is expected to be completed, by means of the transfer of rights and payment, within 10 days from December 7, 2007.

The call option was originally issued by Comstar subsidiary MGTS Finance S.A. to 2711 Centerville Cooperatief U.A. in part payment for the acquisition of a 25% + 1 share stake in Telecommunications Investment company 'Svyazinvest' in December 2006. Access Telecommunications Cooperatief U.A. retains a put option to sell the shares back to MGTS Finance S.A. at any time over the next twenty four months, at the trailing ninety trading day weighted average price of the Comstar Global Depositary Receipt.

The call and put option is revalued at the end of each quarterly reporting period and the change in value over the three months is reported in the Company's income statement. The call element of the option has now been revalued for the last time and will have no further impact on the Company's accounts. The Company's results for the fourth quarter of 2007 will therefore be impacted both by a non-cash gain of approximately US$ 55.8 million arising from the revaluation of the call and put option as at market close on December 7, 2007, as well as by the yet to be determined change in value of the put option over the remaining few weeks of the quarter. The revaluation of the instrument reflects the decrease in the market price of the Comstar GDR from US$ 12.95 on September 30, 2007 to US$ 11.80 on December 7, 2007. The change in value of the remaining put option will be far less volatile and have far less impact moving forward.

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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.

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.