Moscow, Russia – October 1, 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, today announces that it has completed a series of transactions with OJSC Rostelecom (“Rostelecom”) involving the sale by the Comstar group of companies to Rostelecom of the 25%+1 share in the charter capital of Telecommunication Investment Joint Stock Company (“Svyazinvest”). In conjunction with these transactions, Rostelecom transferred RUB 26 billion to the Comstar group of companies.

Specifically, Rostelecom acquired 17.31% of the charter capital in Svyazinvest for RUB 18 billion from Comstar and 7.69% from MGTS Finance S.A., a company controlled by Comstar, for RUB 8 billion.

The proceeds from the sale were used by Comstar to pay off its debt obligations to Sberbank ahead of schedule.

As reported previously, the final completion of the transaction is subject to a number of conditions, one of which is closing the transaction to swap Svyazinvest’s stake in the Public Joint Stock Company Moscow City Telephone Network for the Sistema-Inventure CJSC, a subsidiary of JSFC Sistema (LSE: SSA), stake in SkyLink CJSC.