Moscow, Russia – October 21, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 67 Russian cities, today announced that it has launched a wireless broadband network based on the 802.16e standard WiMAX technology in Armenia and introduced the “Comstar” brand in the local market.

The creation and commercial launch of the wireless network using the 3.6-3.8 GHz frequency range was implemented by Cornet-AM, an Internet service provider in Armenia, and a part of Comstar Group. The WiMAX network, which currently comprises 24 base stations, covers the capital of Armenia, Yerevan, as well as 18 Armenian cities. Airspan Networks (US) was chosen by Comstar as a provider of equipment for the WiMAX network. Base stations are connected via proprietary and rented fibre-optic lines, as well as through radio relay channels, with the backbone based on Cisco’s equipment. The Group intends to expand the coverage zone and the backbone in the future. The total investments in the project amount to US$ 4.6 million in 2007-2008. The volume of further investments in the project will depend on the results of the launch and overall development of the telecommunications market.

Comstar’s WiMAX network in Armenia is used to provide a broad range of telecommunications services, including digital telephony, broadband internet access, data transmission, conferencing and virtual private networks (VPN) for corporate subscribers. Cornet-AM currently provides services to corporate subscribers, and Comstar intends to start servicing residential subscribers and offer voice services in the future. Earlier this year, Cornet-AM applied to the Public Service Regulation Committee of the Republic of Armenia to obtain numbering capacity of 60 thousand telephone numbers. In addition, Cornet-AM has the license to provide inter-city and international connection services for its residential subscribers. Upon the receipt of the requested numbering capacity, Comstar will be able to provide the fixed-line local and long distance telecommunications services in a package with allocated telephone numbers.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The national WiMAX network is a unique project for Armenia, and one of the first projects of its kind worldwide. The network deployment enables us to offer modern communications services in the country and helps to improve the life quality of its population. Some of the citizens will be offered telephony services and broadband internet access at their homes for the first time ever. The launch of this project enables us to truly become a national telecommunications operator in Armenia.”