Moscow, Russia– August 27, 2009 – “COMSTAR – United TeleSystems” OJSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced its unaudited consolidated US GAAP[1] financial results for the quarter and six months ended June 30, 2009.

SECOND QUARTER HIGHLIGHTS

• Consolidated revenues up 19% year on year and 3% quarter on quarter in ruble terms to US$ 363.6 million[2]
• OIBDA[3] up 28% year on year and 12% quarter on quarter in ruble terms to US$ 149.3 million with increased OIBDA margin of 41.1%
• Net income attributable to Comstar-UTS up 36% year on year and doubled quarter on quarter in ruble terms to US$ 30.0 million
• Cash flow from operations up 12% year on year and down 4% quarter on quarter in ruble terms to US$ 102.2 million
• Cash capital expenditure[4] of US$ 15.5 million
• Total assets of US$ 3.7 billion
• Residential broadband ARPU in Moscow up 2% quarter on quarter to RUR 330
• Residential broadband subscriber base in Moscow up 11 thousand since June 30, 2009 to 802 thousand as at August 16, 2009
• DLD/ILD traffic passed through Comstar’ proprietary network increased by 50% quarter on quarter to 71.8 million minutes

HALF YEAR HIGHLIGHTS

• Consolidated revenues up 15% year on year in ruble terms to US$ 698.0 million
• OIBDA up 15% year on year in ruble terms to US$ 275.7 million with stable OIBDA margin of 39.5%
• Net income attributable to Comstar-UTS down 28% year on year in ruble terms to US$ 42.6 million
• Cash flow from operations up 3% year on year in ruble terms to US$ 201.4 million
• Cash capital expenditureof US$ 75.2 million

DELIVERY IN LINE WITH STRATEGIC GOALS

• Broadband development

o    Commercial launch of mobile WiMax network in Moscow

o    1,000 “Comstar-FON” WiFi hot spots in Moscow

o    Residential broadband sales launched in Tver, Kaluga, Tambov, Balakovo and Mirny

• Restructuring of regional operations
  • 7 largest regional subsidiaries merged into “Comstar-Regions” in August 2009
  • STREAM-TV headcount reduced by 12% to 2.9 thousand from since the beginning of 2009
  • New organizational structure for Comstar-Regions created with common standards for cash management, budgeting, financial and management reporting introduced across STREAM-TV Group
• 42% increase in weighted average regulated per minute ruble charge for operators interconnected to Comstar network in Moscow from the second quarter of 2009
• 17% increase in weighted average regulated per minute ruble charge for operators interconnected to MGTS network in Moscow from September 2009

Sergey Pridantsev, President and Chief Executive Officer, commented: “Our second quarter results once again demonstrate the resilience of our business in adverse economic conditions. The investment case remains the same but we revised our strategic priorities for 2009 at the beginning of the year, in order to meet the challenges presented by the current environment. As before, our core objective this year is to maximize cash flows and optimize our investment programmes. We have significantly enhanced the profitability of the Group during the first half of the year following the various cost reduction measures that we have taken. We have also managed to maintain and even grow our subscriber base despite a lower level of investment in marketing. We have not seen any significant impact on churn levels from the increase in tariffs that we introduced from March, which again shows that there is little price elasticity. Furthermore, the stabilization of the dollar/ruble exchange rate has reduced the fluctuation in bad debt levels.”

Irina Matveeva, Chief Financial Officer, added: “We have continued to grow despite the economic downturn, with healthy subscriber acquisition and ARPU levels. Organic year on year revenue growth in the quarter was 9% in ruble terms. Our strict cost control measures enabled us to actually increase our OIBDA margin during the second quarter. We generated RUR 2.8 billion of free cash flow during the second quarter of 2009 and had over RUR 6 billion of cash, cash equivalents and short term investments at the end of June.”

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1Except for the presentation of comparative financial information that has not been restated to reflect the retrospective combination of the financial statements of STREAM-TV, which is a departure from US GAAP (see detailed explanation below)

2  The average exchange rate for the periods were:

32.21 Russian Rubles (RUR) per US$ 1 in the second quarter of 2009; RUR 33.93 per US$ 1 in the first quarter of 2009;

RUR 23.63 per US$ 1 in the second quarter of 2008; RUR 33.07 per US$ 1 in the first six months of 2009;

and RUR 23.94 per US$ 1 in the first six months of 2008

3Here and below, please refer to Attachment A to this statement for a full definition of OIBDA

4Here and below, cash capital expenditure comprises purchases of property, plant and equipment, and intangible assets

[FULL TEXT OF THE PRESS RELEASE]

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Conference call

Comstar will host a conference call today at 8.00 am (ET) / 1.00 pm (UK time) / 2.00 pm (CET) / 4.00 pm (Moscow Time). Participants may access the call by dialling the following numbers:

UK / International: +44 20 8515 2302

US: +1 480 629 9770

A replay facility will also be made available for 7 days after the call and may be accessed by dialing the following numbers and using the following pin code:

UK / International: +44 20 7154 2833
US: +1 303 590 3030

PIN: 4136784#

The replay facility will also be made available at

https://www.comstar.ru/en/for_investors/finresults/2009/2q/ in due course.

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For further information, please visit www.comstar-uts.comor contact:

Comstar-UTS is the leading fixed-line telecommunications company in Moscow. Comstar provides voice, data, television and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and exclusive last mile access to 97% of Moscow households. The Company also offers communications services in five Russian regions, Armenia and Ukraine. Comstar had3.6 million residential subscribers and 791 thousandresidential broadband internet subscribers in Moscow, as well as 324 thousandresidential regional and international broadband internet subscribers and 2.0 million residential regional pay-TV subscribers at the end of June 2009. Comstar generated US$ 698.0 million of revenues and a 39.5% OIBDA margin for the six months ended June 30, 2009. Comstar’s Global Depositary Receipts are listed on the London Stock Exchange (ticker: CMST).

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.

[1]Except for the presentation of comparative financial information that has not been restated to reflect the retrospective combination of the financial statements of STREAM-TV, which is a departure from US GAAP (see detailed explanation below)

[2]  The average exchange rate for the periods were:

32.21 Russian Rubles (RUR) per US$ 1 in the second quarter of 2009; RUR 33.93 per US$ 1 in the first quarter of 2009;

RUR 23.63 per US$ 1 in the second quarter of 2008; RUR 33.07 per US$ 1 in the first six months of 2009;

and RUR 23.94 per US$ 1 in the first six months of 2008

[3]Here and below, please refer to Attachment A to this statement for a full definition of OIBDA

[4] Here and below, cash capital expenditure comprises purchases of property, plant and equipment, and intangible assets