March 25, 2009, Moscow, Sochi. COMSTAR – United TeleSystems (COMSTAR-UTS, LSE: CMST), the leading provider of integrated telecommunication services in Russia and CIS, announced that they plan to develop cable TV and broadband Internet access services in the city of Sochi.

The services to be provided on the basis of COMSTAR-UTS South Branch and a COMSTAR-UTS subsidiary, South Digital Telephone Network CJSC (SDTN). SDTN has been testing cable TV services in Sochi since December 2008. The service is provided to central residential areas of the city via multimedia communication network using FTTB (Fiber to the Building) technology. Currently, this network is being built in the Olympic Games Capital by COMSTAR-UTS. As of today, COMSTAR-UTS subsidiary, SDTN, offers Sochi residents a TV package comprising 50 TV channels. Commercial launch of cable TV service is preliminarily scheduled for Q2 2009.

Besides, COMSTAR-UTS plans to launch broadband Internet access services provision via FTTB multi-service communication network in Sochi, while IP based digital telephony services are scheduled for the second half of the year.

“According to the survey results, current penetration index of broadband Internet access and Pay-TV in Sochi is extremely low. “We expect our services to become very popular among city residents, since the tariffs will be appealing for the citizens of Sochi,” Vladimir Mamay, Director of COMSTAR-UTS South subsidiary, SDTN Deputy Director said. “As soon as we accomplish merging COMSTAR-UTS with SDTN to create a single operating structure in the South of Russia, we will be able to offer appealing package solutions as well”, he added. So far, virtually no local market provider features “double play” services, i.e. TV and broadband Internet access in a common package by the same operator. Whereas, when telephony service is included in this package, COMSTAR-UTS will provide a “triple play” service, which is completely in line with the main strategic objectives of the company Group”, he pointed out.

In 2008 COMSTAR-UTS commenced deployment of metro telecommunication network in the city of Sochi. The network is being constructed using FTTB technology. For indoor infrastructure, COMSTAR-UTS rolls out a distribution network based on coaxial cable for cable TV services and twisted pair (Ethernet technology) for broadband access and telephony. This network will complement existing COMSTAR-UTS transport network currently operated in Sochi. At the final stage of the deployment, the network will cover approximately 70 apartment buildings in the central area of the city. Further plans are to expand the network covering complete Sochi area and adjacent municipal entities.