Moscow, Russia – January 24, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE: CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that it has signed an agreement with Cisco for the delivery of equipment to build NGN multi-service network in Ukraine. Kvazar Mikro, a subsidiary of SITRONICS, will act as a subcontractor for the installation and launch of the network.

Comstar completed the tender for the delivery of equipment to build and modernize the backbone transportation network in Ukraine and city multi-service communications networks in Kiev and Odessa in December 2007. Comstar plans to install Cisco hub router and backbone router and also aggregation and network management equipment. The project is expected to be launched in the second quarter of 2008.

The backbone network equipment will be installed in service centres in Kiev and Odessa, and will join both networks. Other cities will be added to the backbone infrastructure in the future.

Comstar plans to provide its private clients with Triple Play services and its corporate clients with virtual private networks, telephony, high speed broadband, based on multi-service city networks. The number of subscribers is expected to exceed 125,000 by 2011 in Kiev and Odessa.

Alexander Kirillov, Vice President for Technologies of Comstar UTS, commented: “NGN technology will allow us to improve the quality of our services, introduce new products and enable our clients to manage them. The signing of the agreement for the delivery of NGN equipment is an important step for Comstar in building the new generation network in Ukraine. We plan to integrate all future networks in Ukrainian cities where we intend to offer telecom services, into Comstar’s unified NGN Network.”