Moscow, Russia – November 17, 2009 – “COMSTAR – United TeleSystems” OJSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced its unaudited consolidated US GAAP¹ financial results for the quarter and nine months ended September 30, 2009.

Third quarter highlights

- Consolidated revenues up 15% year on year and stable quarter on quarter in ruble terms at US$ 375.1 million²

- Adjusted OIBDA³ up 13% year on year and 4% quarter on quarter in ruble terms to US$ 161.1 million with increased margin of 43.0% in ruble terms

- Net income attributable to Comstar-UTS of US$ 26.9 million

- Cash and cash equivalents and short term investments up 46% quarter on quarter in ruble terms to US$ 293.3 million

- Cash flow from operations up 12% quarter on quarter in ruble terms to US$ 117.8 million

- Cash capital expenditure⁴ of US$ 18.0 million (4.8% of revenues)

- Free cash flow⁵ up 2.6 times year on year and 12% quarter on quarter in ruble terms to US$ 99.8 million

- Residential broadband ARPU in Moscow up 14% year on year to RUR 319

- Total broadband subscriber base up 32% year on year and 3% quarter on quarter  to 1.2 million

- DLD/ILD traffic passed through Comstar’s proprietary network increased by 59% quarter on quarter to 114.7 million minutes

Nine months highlights

- Consolidated revenues up 15% year on year in ruble terms to US$ 1,073.1 million

- Adjusted OIBDA up 14% year on year in ruble terms to US$ 439.8 million with margin of 41.0% in ruble terms

- Net income attributable to Comstar-UTS of US$ 69.5 million

- Cash flow from operations up 2% year on year in ruble terms to US$ 319.2 million

- Cash capital expenditureof US$ 93.2 million (8.9% of revenues in ruble terms)

- Free cash flow up 64% year on year in ruble terms to US$ 226.0 million

Strategic developments

- Completion of sale of Sistema’s 50.91% stake in Comstar to Mobile TeleSystems (“MTS”) for a total consideration of RUR 39.15 billion (approximately US$ 1.32 billion) on October 12, 2009

- Agreement with Sberbank to adjust repayment terms for 5-year RUR 26 billion ruble-denominated credit facility (89% of total debt). The first two repayment installments, each in the amount of  RUR 2.2 billion, have been postponed from September and December 2009 until March and June 2010, respectively

- Capital expenditure budget for 2009 increased from 6% to 8% of Group revenues and to be used to connect new subscribers and selectively modernize  the Group’s regional networks

- Moody’s Investors Service confirmed "Ba3" corporate family rating with a stable outlook for Comstar

- Standard & Poor’s Ratings Services confirmed “BB” corporate credit with stable outlook for Comstar

- Continued restructuring of regional operations: in August 2009 seven largest regional subsidiaries were merged into “Comstar-Regions”; in October Comstar-UTS acquired eight cable TV providers in regions of Russia from JIR Broadcast Inc., a 100% subsidiary of Comstar-UTS, in October Comstar started the merge of another eighteen largest regional subsidiaries into “Comstar-Regions”

Sergey Pridantsev, President and Chief Executive Officer, commented: “Our third quarter results have once again demonstrated the resilience of our business in challenging economic conditions. The unique business combination enables us to continue to deliver OIBDA margins that is in line with those of top fixed line telephony peers around the world. Our OIBDA margin for the first nine months of the year was 39.9% and Group revenues grew by 15% year on year for the year to date in ruble terms, with organic revenues up 6%. We now expect our organic revenues to be up mid single percentage points for the full year in ruble terms. We are the clear number one provider of residential broadband and pay-TV services in Russia, with a total of 1.2 million broadband internet subscribers and 2.1 million pay-TV subscribers and an addressable market of 7.5 million households passed. Our goal is to continue to develop our presence in Moscow by increasing the penetration of our broadband internet and pay-TV services in MGTS households, as well as to expand our regional presence. We continue to review opportunities to acquire operators with similar business models in these target cities, and we are also considering a number of selective green-field start-up projects where there is considerable anticipated demand for our services and the required rate of return.”

“MTS’s majority ownership enhances the competitive landscape and the potential of our operations in Moscow and the regions because we plan now to use the strong MTS brand to develop the alternative part of the business, to optimize the development of our backbone and long-distance networks, and to offer unique bundled service offerings to our customers.”

Irina Matveeva, Chief Financial Officer, added: “The results for the first nine months of 2009 support the refocusing of our efforts towards the maximizing of our cash flows and the integration of existing assets. We generated 7.4 billion rubles of free cash flow during the nine months of 2009 and had 8.8 billion rubles of cash, cash equivalents and short-term investments at the end of September. We have also demonstrated the flexibility in our CAPEX planning by reducing the investment levels as a percentage of revenues from more than 20% in previous years to under 9% for the first nine months of 2009. This led to free cash flow increase by 64% year on year to RUR 7.4 billion for the year to date.”

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¹Except for the presentation of comparative financial information that has not been restated to reflect the retrospective combination of the financial statements of STREAM-TV, which is a departure from US GAAP (see detailed explanation below)

²The average exchange rate for the periods were:

31.33 Russian Rubles (RUR) per US$ 1 in the third quarter of 2009; RUR 32.21 per US$ 1 in the second quarter of 2009; RUR 24.25 per US$ 1 in the third quarter of 2008; RUR 32.48 per US$ 1 in the first nine months of 2009; and RUR 24.05 per US$ 1 in the first nine months of 2008

³Here and below, please refer to Attachment A to this statement for a full definition of OIBDA and reconciliation of Adjusted OIBDA

⁴Here and below, cash capital expenditure comprises purchases of property, plant and equipment, and intangible assets

⁵Here and below, Free Cash Flow is calculated as operating cash flow net of cash capital expenditure

Conference call

Comstar will host a conference call today at 8.00 am (ET) / 1.00 pm (UK time) / 2.00 pm (CET) / 4.00 pm (Moscow Time). Participants may access the call by dialling the following numbers:

UK/ International:           +44 20 7190 1596
US:                                  +1 480 629 9770

A replay number will be available for 7 days after the conference call. To access the replay, please dial:

UK/ International:           +44 20 7154 2833
US:                                  +1 303 590 3030

The replay access number is 4180974#

The replay facility will also be made available at https://www.comstar.ru/en/for_investors/finresults/2009/3q/ in due course.