Moscow, Russia – October 28, 2009 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced that its has commenced the next stage of the reorganization of Comstar-Regions, which is 100% owned by Comstar, through the commencement of the merger of Comstar’s eighteen regional subsidiaries offering telecommunications services to corporate and residential subscribers in seven Russian regions.

In August 2009, Comstar completed the first stage of the reorganization of its regional business through the merger of seven of its largest subsidiaries into Comstar-Regions which serves as a centre for consolidation of the Group’s regional assets. Comstar-Regions now comprises branches in the Central, North-West, Southern, Volga, Ural and Siberian Federal Districts, with corresponding centers in Moscow, St. Petersburg, Rostov-on-Don, Saratov, Yekaterinburg and Tyumen.

Viktor Koresh, Vice President for the Regional Development of Comstar and General Director of Comstar-Regions, commented: “Comstar-Regions’ reorganization is being implemented within the framework of the second stage of our Group regional assets’ restructuring, which will enable us to both optimize the Group’s structure and increase the business management efficiency. We intend to merge the rest of our regional companies into Comstar-Regions over time.”