Moscow, Russia – November 23, 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 concluded a non-binding MOU with OAO Svyazinvest and AFK Sistema to begin negotiations over the reorganization of certain assets, that if realized could ultimately lead to the disposal of Comstar’s stake in Svyazinvest and the increase in its ownership stake in OAO Moscow City Telephone Network (MGTS).

Comstar currently owns 25% +1 share of Svyazinvest and a 55.73% stake in MGTS. Svyazinvest owns a 23.33% stake in MGTS. The MOU contemplates, among other things, a potential sale by Comstar of the respective interest in Svyazinvest, the acquisition of a stake in MGTS and the restructuring of certain indebtedness in connection with the deal.

The precise terms and consummation of the transactions remain subject to the negotiation and execution of definitive binding documentation by these and potentially other parties as well as satisfaction of any applicable conditions (including receipt of any required regulatory approvals and valuations). No assurance can be given that any of the parties will execute definitive documentation or that any of the contemplated transactions will occur.

This press release is being issued to ensure compliance with the UK Listing Authority.