Moscow, Russia – August 24, 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 it has soft launched a backbone multiservice fibre-optic network connecting Moscow and Rostov-on-Don.

The network construction commenced in 2008 on the basis of ECI equipment and applied Dense Wavelength Division Multiplexing technology. The new telecommunications network, spanning approximately 1,350 km and with a data transmission speed capacity of 10 Gigabits per second, passes through Tula, Lipetsk, Voronezh, Kamensk-Shakhtinsk, Shakhty and Novocherkassk. The overall investment in the project amounted to over RUR 146 million (US$ 4.6 million).

Comstar’s transport optic infrastructure enables transmission of both voice and data telecommunication traffic on an IP protocol basis. Comstar is therefore able to provide its local subscribers with a full range of fixed-line telecommunications services, including long-distance connection, broadband internet access and pay-TV.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The soft launch of the backbone multiservice network is a milestone in the implementation of our transport network development programme. The proprietary backbone network is a prerequisite for successful operations of a national telecommunications operator. The overall concept of transport network development was approved by the Comstar Science and Technology Committee in November 2008, and we are consistently working on its implementation. Our proprietary backbone networks will allow us to significantly reduce our costs related to channel rent, and expand our presence in long-distance connection segments, such as exchange of traffic between operators and international transit. Our reduced dependence on the large backbone network operators lending us their networks will enable us to decrease the costs of traffic transmission and, through that, reduce the service costs for our regional subscribers”.