April 29, 2010, Moscow, Ivanovo: COMSTAR – United TeleSystems (COMSTAR-UTS, LSE: CMST), the leading provider of integrated telecom solutions in Russia and the CIS, announces that Ivanovo Telecom Center of the Central Branch of COMSTAR-Regions (100% subsidiary of COMSTAR-UTS) has started the 2nd stage of the project to develop over-the-air digital TV broadcasting.

On October 1, 2009, COMSTAR commercially launched digital over-the-air TV in Ivanovo based on MMDS (Multichannel Multipoint Distribution System). This project has enabled to significantly enhance TV signal quality, increase the number of broadcasted channels from 22 to 33, expand the coverage and prevent unauthorized watching thanks to the digital signal coding system.

Over half a year, COMSTAR has provided its MMDS subscribers in Ivanovo with set-top-boxes required to watch TV programs in a digital format, free of charge. For subscribers’ convenience, there is a retailing chain in Ivanovo where official dealers of COMSTAR sell digital set-top-boxes. In these outlets, subscribers may purchase access cards and conclude service agreements. A broad network (over 100 points) of digital TV payment terminals has been also deployed.

On April 1, 2010, public broadcasting of analogue TV channels was discontinued, and the 2nd stage of the project was launched. During this stage, Ivanovo Telecom Center of COMSTAR intends to significantly enhance the digital TV subscriber base by attracting new subscribers. There is a special campaign being rolled out that will be valid till the end of May. Under this campaign, new users will be able to purchase equipment and get connected to the digital multichannel TV at only 1,999 roubles in offices of COMSTAR and its official dealers.

Dmitry Bagdasaryan, Deputy Director General – Commercial Director of COMSTAR-Regions, notes: “We are carrying on with the implementation of our network upgrade program in regions of our presence using both analogous and digital technologies to deliver the signal to customers. Migration to the digital over-the-air broadcasting in Ivanovo is our successful pilot that is being implemented as a part of the common COMSTAR strategy.”

According to Elena Pasnyuk, Commercial Director of the Central Branch of COMSTAR-Regions, “the success of this project depends on the service value for our subscribers, which lies in affordability when getting connected to the service, composition of packages comprising the most popular TV channels and easy-to-use service, including a TV guide to view the channels.”

Vladimir Anisimov, Director General of Ivanovo Telecom Center of the Central Branch of COMSTAR-Regions, says: “Migration to the digital broadcasting has enabled a significantly enhanced TV service coverage. We hope that new subscribers will also appreciate a high signal quality and a broad range of channels, including local information programs of Ivanovo.”

Ivanovo Telecom Center provides digital over-the-air TV services based on MMDS technology within a radius of 20 km from the head-end located at Panina street, 26 À. This service is in high demand by dwellers of the private sector, low-rise buildings and remote districts: Kokhma, Combined Heat Power Plant-3, Melange Plant, Working Settlement, holiday partnerships and suburbs. Currently, the number of households using COMSTAR cable and over-the-air TV services in Ivanovo exceeds 76,000, with approximately 5,000 of them using digital MMDS.