Moscow, Russia – November 17, 2010 – “COMSTAR – United TeleSystems” JSC (“Comstar”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 83 Russian cities, with a presence in Ukraine and Armenia, announces that the Board of Directors of its majority-owned subsidiary, PJSC Moscow City Telephone Network (“MGTS”), has recommended to accept the mandatory tender offer by CJSC Sistema-Inventure (“Sistema-Inventure”). The recommendation was made following a thorough review of the terms and conditions set forth in the mandatory tender offer.

Comstar announced on November 12, 2010, that MGTS had received a mandatory tender offer from Sistema-Inventure to acquire 1,625,691 MGTS ordinary shares, or 2.04% of MGTS ordinary shares, for RUB 436.20 per share.

Holders of MGTS ordinary shares will have 70 days to accept or decline the offer, which will be open until the end of January 20, 2011. The mandatory tender offer and the MGTS Board of Directors’ recommendation will be published in the media and will be sent to the holders of the MGTS ordinary shares within 15 days from the date of the receipt of the offer from Sistema-Inventure, in accordance with the legal requirements of the Russian Federation.

Following the completion of the reorganization of JSFC Sistema’s telecommunications assets in October 2010, Sistema-Inventure acquired 28% of MGTS’ ordinary shares. The Sistema group of companies now owns a combined 97.96% of MGTS’ ordinary shares, which therefore exceeds 75% of MGTS ordinary shares. In accordance with Russian Federation legislation, Sistema-Inventure, as the last buyer of MGTS shares, is obliged to make a mandatory tender offer to the remaining holders of MGTS ordinary shares to acquire their shares. Comstar increased its shareholding in MGTS to 69.96% of the company’s ordinary shares in December 2009.