MOSCOW-- “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE:CMST), the leading integrated telecommunications operator in Russia and the CIS, today announced that it has completed the acquisition of 100% of the share capital of Interlink Group for a total cash consideration of RUB 200 million (approximately US$ 8.5 million1). The Group comprises Intersvyaz Service, the alternative fixed-line telecommunications operator, and Inter-TV Media, the cable TV operator, which operate under the unified brand “Interlink” in Ryazan and the Ryazan region.

The Interlink Group is one of the leading players in the alternative fixed-line communications market in Ryazan and the Ryazan region. Intersvyaz Service provides telephony services, internet access, leased channel services, design and the development of fibre-optic and other cable networks. The company serviced over 15,000 telephone numbers, including 90% of numbers for residential subscribers, and provided internet access to over 2,000 subscribers, as at the end of 2007. Inter-TV Media is a cable TV operator which provided services to over 20,000 cable TV subscribers as at the end of 2007, including analogue and digital TV services, as well as video surveillance solutions. The Group’s fibre-optic network covers over 95% of the territory of Ryazan. The Group companies obtained licenses for the 2.5-2.7 Ghz frequency range, which will provide for the development of WiMAX-based services in the region.

The Group reported revenues of US$ 4 million, up by 45% year-on-year, with OIBDA of US$ 1.1 million and an OIBDA margin of 27% as at December 31, 2007.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The Interlink Group is a company with significant growth potential. The Group operates in the areas of the telecommunications industry which are of high priority for Comstar. The Group is expected to launch wireless broadband services based on WiMAX technology in the future. The announced deals are in line with our strategy to expand our operations in the Russian regions, through the acquisitions of leading regional telecommunications operators. We are strengthening our position in the Central Federal District, one of the most economically developed districts in Russia. We intend to expand our service offerings in the Ryazan region, providing broadband internet access, TV services and long-distance connection.”

In addition to the Ryazan region, Comstar currently operates in the Ivanov and Kaluga regions of the Central Federal District of Russia.