Comstar UTS Increased Its Stake In MGTS.

MOSCOW -- JSC "COMSTAR - United TeleSystems" ("Comstar UTS") (LSE:CMST), the leading provider of integrated communications services in Moscow, today announced that it acquired 1,605,500 ordinary shares in Moscow City Telephone Network (MGTS). The acquired shares represent 2.01% of the Company's outstanding ordinary shares or 1.68% of the Company's total shares. The shares were purchased at market price.

Upon completion of this transaction, Comstar UTS interest in MGTS amounts to 65.66% of the Company's ordinary shares or 54.72% of the Company's total shares.

Commenting on the purchase of shares, Eric Franke, President and Chief Executive Officer of Comstar UTS, said: "The acquisition of additional shares follows on the second public share purchase offer and is in line with the strategy of consolidating our shareholding in Moscow City Telephone Network. We believe that further integration of our companies will produce significant synergies for the benefit of our shareholders".

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

Comstar UTS is a leading provider of integrated communications services in Moscow and the Moscow region in terms of revenues and subscribers and also offers communications services in other regions of Russia and the Commonwealth of Independent States. Comstar UTS had 3.6 million subscribers in its traditional segment of the business, 479.2 thousand subscribers in its alternative segment in Moscow and 91.1 thousand subscriber in its alternative segment in the regions at June 30, 2006. Comstar UTS offers voice, data and Internet, pay-TV and various value-added services to corporate, operator and residential subscribers, using its alternative and traditional fixed-line networks. Comstar UTS had consolidated operating revenues of US$ 286.6 million for the second quarter of 2006 and Comstar UTS' consolidated assets totalled US$ 2.7 billion at June 30, 2006. Comstar UTS ordinary shares are listed on the Moscow Stock Exchange and on the London Stock Exchange under the symbol "CMST".

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 you 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.