Comstar-UTS Announces Purchase of WiMAX License in Ukraine.

MOSCOW -- JSC "COMSTAR - United TeleSystems" ("Comstar UTS") (LSE:CMST), the leading provider of integrated telecommunication services in Russia and the CIS, today announced that its Ukrainian subsidiary, "Technological Systems", has received a license for provision of WiMAX-based services in the range of 5.4 - 5.7 GHz through a regional tender in Kiev, Kiev region, Odessa, Odessa region, as well as in Lvov and Lvov region. The total cost of this license was US$ 0.8 million.

The market for broadband services in Ukraine is currently estimated to grow at an annual growth rate of 20-30%. "Technological Systems" will use this license to rollout a full-scale wireless network in the largest business centres of the country, where the development of broadband services is slowed down by the lack of fixed line infrastructure.

"We are very enthusiastic about the dynamic growth of broadband services in Ukraine. We believe that Kiev and other regions in Ukraine, which are covered by our license, have significant development potential from the rollout of WiMax-based services", - commented Erik Franke, CEO of "Comstar - UTS". "Synergies in Comstar - UTS group and our practical experience in using WiMAX-based technologies in Russia and Armenia will provide us with a substantial advantage over our competitors in gaining a sizable market share of corporate users in Ukraine".

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.