Comstar UTS AND MGTS Launch Wi-Fi Coin-Box Telephones.

MOSCOW -- "COMSTAR - United TeleSystems" ("Comstar" or "the Group") (LSE:CMST), the leading combined telecommunications operator in Russia and CIS, and Moscow City Telephone Network (MGTS), announced today that they have started the construction of Wi-Fi coin-box telephones network in Moscow. Under the terms of agreement, 200 coin-box telephones will be integrated in Comstar's unified network, providing customers with access to a wireless Wi-Fi connection.

The Wi-Fi coin-box telephones will be installed at train stations, airports and hotels, which are currently not provided with Comstar's Wi-Fi connection. Customers will be able to use pre-paid cards, SMS-authorisations and MGTS phone cards to access the internet.

Eric Franke, President and Chief Executive Officer, commented: "The launch of Wi-Fi coin-box telephones is the next step in the implementation of our strategy to develop the services of Comstar's unified Wi-Fi network. The current project is of particular importance for us as it will help to address growing demand from Comstar-Direct's customers for wireless connection. Wi-Fi connection will be available to a significant number of clients in public places with a high demand for this type of solution and with no existing presence of Comstar UTS. We expect to double the number of hot spots every year in Moscow".

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

Public Joint Stock Company Moscow City Telephone Network (PJSC MGTS) is one of Europe's largest local wire communication companies. Its continual top priority goal is providing quality and affordable voice services to millions of Muscovites. The Company services about 4.3 million subscribers and runs 561 telephone exchanges. The public payphone network, MGTS' component part, has 8,000 paystations in operation. MGTS' share of main phone numbers on the Moscow fixed communication market is 77.2 percent. Its stable economic situation provides for the Company's dynamic development, predictable revenue and sales growth rates. PJSC MGTS' headquarters are located in Moscow, Petrovsky Boulevard, 12, building 3. Our Web site is www.mgts.ru

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 MGTS. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," and the negative derivatives of such terms or other similar expressions. We wish to caution you that these statements are only predictions, and those actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. There is a multitude of factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, the economic climate in general, our competitive environment, risks associated with maintaining business in Russia, rapid technological and market changes in our industry fields, as well as many other risks that have a direct bearing on MGTS and its operation.