Moscow, Russia – May 14, 2010 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 82 Russian cities, today announced that it has completed a transaction to increase its shareholding in CallNet Enterprises Ltd., which owns 100% of the Armenian operator Cornet. The Group has acquired 25% minus 1 share of CallNet and now controls 100% of the company.

Cornet is one of the leading communication operators in Armenia, and offers digital local and long distance telephony services, broadband internet access, data transfer and corporate network management services, utilizing both fixed line technologies as well as WiMax wireless services. Cornet uses both proprietary and rented fiber optic and radio relay networks. The company’s customers comprise both private and corporate subscribers, government organizations and other communication operators.

Comstar’s initial shareholding of 75% plus 1 share in CallNet was acquired in October 2006.