Moscow, Russia – December 23, 2009 – “COMSTAR – United TeleSystems” JSC (Comstar-UTS) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced that it has acquired 14.20%* of the share capital of its subsidiary Moscow City Telephone Network JSC (MGTS) (2,462,687 ordinary shares and 11,135,428 preferred shares) from minority shareholders, whilst MGTS Finance S.A., which is a part of the Comstar-UTS Group, has sold an 11.06%** stake in Comstar–UTS (46,232,000 shares) to Mobile TeleSystems (NYSE: MBT). Comstar’s stake in MGTS has increased to 69.93% of the share capital (or 69.96% of total number of ordinary shares and 69.75% of total number of preferred shares). Mobile TeleSystems’s stake in Comstar–UTS has increased to 61.97%.

Sergey Pridantsev, President and Chief Executive Officer of Comstar–UTS, commented: “In line with Comstar’s strategy to achieve more effective governance by building a larger stake in MGTS, its key asset, and to simplify the Group’s ownership structure, this series of transactions have resulted in an increase in Comstar’s stake in MGTS to 69.93%, and the cross ownership between MGTS group and Comstar–UTS has been reduced to 2.75%”.

* MGTS shares have been acquired from minority shareholders in exchange for 1.60% of MTS shares. In addition, US$ 7.3 million in cash was paid by Comstar Group to minority shareholders.

** Comstar-UTS shares have been sold to MTS at a price based on the MICEX price on December 17, 2009 in exchange for 1.60% of MTS shares. Additional US$ 8.3 million in cash is to be paid by MTS to Comstar Group.