MOSCOW – “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 selected Nortel (NYSE/TSX:NT) equipment to develop the first mobile WiMAX network in Moscow. 160 base stations are expected to be built in Moscow by the end of 2008. The overall investments in the project are expected to amount to approximately US$ 20 million in 2008.

The building of the IEEE 802.16e standard (2.5-2.7 Ghz range) based network has already started and is expected to be completed by the end of 2008, with Kvazar-Micro (now renamed as SITRONICS Information Technologies) acting as the equipment supplier and Intellect-Telecom as
the project designer.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The mobile WiMAX network, which will be added to other broadband internet access technologies, will allow us to provide a very broad range of telecommunications services to our subscribers in Moscow, whether at home, in the office or on the street. The offering, which comprises a wide spectrum of unique solutions, will increase our subscriber loyalty and strengthen our position in the Moscow broadband internet access market.”