Moscow, Russia – March 26, 2010 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 82 Russian cities, today announced that the Extraordinary General Meeting of Shareholders (“EGM”) of Moscow City Telephone Network (“MGTS”), held today, approved the proposed dividend payment of RUR 20.16 per preferred share (or approximately US$ 0.68). Comstar holds 69.93% of MGTS’ share capital, which corresponds to 69.96% of the total number of ordinary shares and 69.75% of the total number of preferred shares.

The total dividend payment for the twelve months ended December 31, 2008 comprises RUR 321.9 million, or approximately US$ 10.9 million, and will be paid to holders of MGTS preferred shares as at the record date of February 15, 2010. The total dividend represents approximately 10% of MGTS’s net income for 2008 under Russian Accounting Standards. The dividend is due to be paid within 60 days of the approval by the EGM. Preferred shares become non-voting upon dividend payment. The Annual General Meeting of Shareholders in MGTS will be held in June 2010, and will decide on a dividend for the full year 2009.