Comstar-UTS Announces the Acquisition of a Majority Stake in Hellas On Line in Greece.

MOSCOW -- JSC "COMSTAR - United TeleSystems" ("Comstar UTS", LSE: CMST), the leading provider of integrated telecommunications services in Russia and the CIS, today announced that it has reached an agreement with Intracom Holdings (ASE:INTRK) to subscribe to a 51% stake in Hellas On Line SA's (HoL) for a cash consideration of [euro]47.9 million. The closing of the transaction, subject to certain conditions precedent including approval of Greek regulatory authorities, is expected during the first quarter of 2007.

Founded in 1993, Hellas On Line (HoL), is the first Internet service provider in Greece, and has been a member of the Intracom Holdings Group since January 2006. HoL is one of the largest alternative fixed-line operators in Greece and the third largest broadband provider with approximately 12% market share. HoL provides ADSL and dial up services to consumers, as well as VOIP, VPN and hosting services to corporate clients. The company has already deployed more than 90 km of fiber in Athens, and plans to further build out its infrastructure in the capital as well as other large cities. HoL's residential client base includes approximately 35,000 broadband and 70,000 dial-up subscribers. The company's revenues in 2005 amounted to [euro]25.6 million, 40% of which were derived from services to residential customers.

Broadband penetration in Greece is still relatively low and does not currently exceed 6% of households, while the average penetration level for Western Europe is approximately 36%.

Eric Franke, Chief Executive Officer of Comstar - United TeleSystems, commented: "We are very pleased to announce this deal and have high hopes for this project, taking into account the benefits of the partnership with such a strong regional player as Intracom Holdings, and the positive conditions in the Greek market. The fixed-line market and broadband segment have significant growth potential in Greece. The acquisition of Hellas on Line will allow us to create a basis for the development of broadband services in the market, which is characterised by the lowest penetration in Europe. Due to the similarity of HoL's business model to our own, we are planning to integrate HoL into Comstar-UTS's structure and rebrand its services and product offerings to increase its operating efficiency."

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, 477.3 thousand subscribers in its alternative segment in Moscow and 92.2 thousand subscriber in its alternative segment in the regions at September 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".

INTRACOM HOLDINGS was founded in 1977. INTRACOM SA is listed on the Athens Stock Exchange since 1990 and included in the FTSE/ASE-20 LargeCap index. In December 2005 INTRACOM was transformed to a holding company under the name INTRACOM HOLDINGS, being one of the largest multinational technology groups in South-Eastern Europe. The Group's major participations are: INTRACOM TELECOM (telecommunication systems and solutions), INTRACOM DEFENSE ELECTRONICS (defense electronics systems), INTRACOM IT SERVICES (IT solutions for the public sector, banking and enterprises), INTRAKAT (construction, high-tech installations, steel structures, infrastructure maintenance) and Hellas On Line (Internet and voice services provider). INTRACOM HOLDINGS, as a group, has 5,700 employees, exports to 60 countries and operates subsidiaries in 19 countries. For more information please visit: www.intracom.com.

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.