Moscow, Russia – July 3, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE: CMST), the leading integrated telecommunications operator in Russia and the CIS, today announced that it has implemented Oracle E-business Suite, the full-scale Enterprise Resource Planning (“ERP”) system from Oracle. The total investment in the project amounted to US$ 12 million.

Comstar commenced the introduction of the ERP system in 2005. The project was implemented in several stages, with Kvazar-Micro (now renamed as SITRONICS Information Technologies) acting as a prime contractor. Over 500 Comstar employees have been trained to work in the new system as users.

Comstar implemented the process automation stage which included contract management, procurement payments and other treasury functions, between 2005 and 2006. The second stage of the project commenced in the Autumn of 2006 and involved the automation of financial, tax and accounting management, legacy IT-systems replacement and the introduction of unified accounting and management data to the centralized Oracle E-business Suite system. The management team was thereby equipped with a powerful tool to control and execute the Company’s operations, based on the best enterprise business process management practices. The system users operate in an integrated information infrastructure which eliminates duplication and provides an end-to-end control at all levels of accounting and reporting. The current implementation includes the following modules of ERP system: Oracle Purchasing, Oracle Account Payables, Oracle Warehouse Management, Oracle Treasury, Oracle Projects, Oracle Fixed Assets, Oracle General Ledger and Oracle Financial Consolidation Hub.

Alexey Goncharuk, First Vice President of Comstar UTS, commented: “The introduction of the ERP system has enabled us to create an integrated information infrastructure and optimize the business processes within the Company. This is of great benefit to Comstar as one of the leading players in the Russian telecommunications market and a public Company listed on the London Stock Exchange.”

Irina Matveeva, Chief Financial Officer of Comstar UTS, added: “The ERP system increases management efficiency and provides greater transparency, both of which should have a positive impact on Comstar’s market capitalization.”