Comstar Completed Building Long Distance Network.

MOSCOW -- "COMSTAR - United TeleSystems" JSC ("Comstar" or "the Company") (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that it has completed building its inter-city and international network. The total volume of capital investments in the project amounted to approximately US$ 14 million. Comstar applied to the Ministry for Information Technologies and Communications of the Russian Federation to receive access codes for providing long distance services.

The project involved the organization of points of presence in all Russian subjects and installation of seven inter-city transit connection nodes in all federal districts of Russia, as well as four international connection nodes. Comstar has also signed interconnection agreements with all Russian zonal operators as well as international providers. All the Company's nodes and points of presence are connected with channels, including rented ones.

Comstar built the network according to practices and codes adopted by the telecommunications industry. Comstar's local and international network is based on NGN technology used for providing voice services and new multi-media solutions. The NGN network runs on Nortel switches and media gateways. The universal platform allows for centralized management of the whole network and deployment of new services in the shortest possible time.

Comstar's long distance network will be used for transmission of the Company's own traffic and provision of inter-city and international connection services to Comstar's subscribers.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: "Upon the receipt of the access codes, Comstar will be able to provide integrated telecommunications services in one package which serves as an additional competitive advantage for us as a universal telecommunications operator, as well as a necessary condition for a successful and large scale regional development. Our clients will benefit from an integrated service offering, unified billing, attractive tariffs and convenient payment options. We are confident that this will help us increase our subscribers' loyalty."

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

Comstar UTS is the leading fixed-line telecommunications company in Moscow, 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 exclusive last mile access to 98% of Moscow households. The Company also offers communications services in five Russian regions and certain CIS countries. Comstar had 3.6 million residential subscribers in Moscow, 452,600 broadband internet subscribers in Moscow, 108,600 corporate subscribers in Moscow, and approximately 94,100 regional and international subscribers, as at September 30, 2007. Comstar UTS reported operating revenues of US$ 1,080 million and a 43% OIBDA margin for the nine months ended September 30, 2007. Comstar GDRs are listed under the symbol "CMST" on 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.