Moscow, Russia – July 30, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the leading integrated telecommunications operator in Russia and the CIS, today announced that it has built a zonal telephone network in the Moscow region. The overall investments in the project amounted to over US$ 7 million.

The Group has also obtained permission from the Federal Service on Supervision in the sphere of Mass Communications, Connection and Preservation of Cultural Heritage to utilize the telecommunications facilities in order to provide inter-zonal telephone connection services which are expected to be launched by Comstar’s regional branch from August 1, 2008.

Dmitry Dronov, Head of the Moscow regional branch of Comstar UTS, commented: “One of our major goals is to become a multi-service operator in all the regions of our presence. In the Moscow region, Comstar is becoming a universal operator providing local, zonal and long distance telephony services. We have a significant advantage of providing the full spectrum of telecommunication services – including telephony, broadband internet access, cable and IPTV solutions, as well as VPN services – delivered by the same operator. We are now expanding our local presence. Comstar currently provides services to both corporate and residential subscribers in 24 districts of the Moscow region. We are planning to enter the remaining districts of the region by 2011, securing not less than a 20% share of the regional telecommunication market. We also intend to start providing access to our network for zonal and long distance traffic from the local telecommunications operators in the Moscow region.”