Comstar UTS Acquires 25% Stake in Comstar-Ukraine.

MOSCOW -- "COMSTAR - United TeleSystems" JSC ("Comstar") (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that it has acquired the remaining 25% minority stake in the Ukrainian subsidiary Comstar-Ukraine from Neotel, its Ukrainian partner, for a total cash consideration of US$ 0.9 million. Following the closing of this transaction, Comstar UTS will become the sole owner of Comstar-Ukraine.

In accordance with the local regulations, Comstar purchased a 24% stake in Comstar-Ukraine, while UTS MGTS, a 100% subsidiary of MGTS, acquired the remaining 1% stake.

Mladen Pejnovic, Vice President for International Business Development, commented: "This acquisition was done in accordance with the Company's strategy of consolidating minority shareholdings in its subsidiaries to allow full control over the development and operations in these companies."

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.