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January 31, 2008

Comstar to build first WiMAX network in Armenia

Moscow, Russia – January 31, 2008 – “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 started building a wireless broadband network based on the 802.16e standard WiMAX technology in the Republic of Armenia. The project is expected to be completed in the second part of 2008.

The creation of the wireless broadband network will be implemented on the basis of Cornet, an Internet services provider in the Republic of Armenia and a part of Comstar Group. Cornet has a license to use 3.6-3.8 GHz frequency range throughout the territory of Armenia.

As a result of the tender in December 2007, Airspan Networks (US) was chosen by Comstar as a provider of equipment for the base stations.

24 base stations are expected to be built during the first stage of the WiMAX project in Armenia. The data transmission will be implemented via rented fibre-optic lines, as well as through radio bridges and radio relay channels. Comstar will also install two data transmission nodes based on Cisco’s technology, which will connect the network in Armenia to the main internet channels.

The later stages of the project development presuppose an increase in the number of base stations in order to expand the coverage, as well as building new proprietary communication lines to the backbone.

Comstar intends to use its WiMAX network to provide high speed internet access, multimedia content delivery, voice services (VoIP), data transmission and the capability of creating virtual private networks (VPN) for residential and corporate subscribers.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “WiMAX is one of the most advanced and promising technologies which allows providing clients with a very broad range of telecommunications services. We intend to launch the network this year and, therefore, become the first and the largest wireless broadband internet operator in Armenia.”


Note for Editors:

WiMAX (the Worldwide Interoperability for Microwave Access) is a telecommunications

technology which provides wireless broadband access. WiMAX currently provides

portable, fixed (IEEE 802.16d standard) and mobile (IEEE 802.16e standard) broadband

access with the ability to function when the user’s subscriber station is far from the

operator’s base station. The WiMAX base stations cover the radius of up to 1,5 km. in

urban areas, and up to 3-5 km. in countryside.




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