Moscow, Russia – March 28, 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 completed the design phase of its launch of a telecommunications and multimedia FTTB network in 2014 Olympic host city Sochi in the south of Russia.

Comstar will start building the ‘Fibre to the Building’ network in Sochi in the coming months. The fibre-optic transport network will connect into residential homes and new equipment will be installed in apartment buildings. The distribution network will consist of coaxial cable to deliver cable TV services, and “twisted pair” ethernet technology to enable voice and broadband connections.

The first stage of the project comprises the building of a network to cover 4,500 flats in the central district of Sochi, and is expected to be completed in 2008. Comstar then plans to expand the FTTB network across Sochi and into neighboring towns, and to integrate the new network into Comstar’s existing transport network in Sochi.

The launch of the new multimedia network will allow Comstar to expand its services, such as voice and high-speed broadband internet access, to the new territories, as well as to roll out pay-TV services in the region.

Viktor Koresh, Vice President for the Regional Development, commented: “We are building this multimedia network in one of our priority regions, where broadband and pay-TV penetration is still very low, in line with our Russia wide development strategy to offer bundled and high quality services. We see a clear demand for such services.”

The project is being implemented in line with the previously announced network upgrade programme in Sochi, which will enable Comstar to advance its service offering and level of content provision. The basic TV channel package is expected to comprise around 50 TV channels, while the premium packages will include up to 90 popular Russian and European channels.

The launch of the multimedia network will provide Comstar’s residential and corporate subscribers in Sochi with enhanced internet services, such as IP-TV, access to inter-city internet resources and the introduction of unlimited tariff plans for broadband internet services.