Moscow, Russia – September 23, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 67 Russian cities, today announced that it its subsidiary, Digital Telephone Networks South (“DTN”), the largest alternative telecommunications operator in the Southern Federal District of Russia, has started subscriber trials in the multiservice network based on fiber-to-the-building (“FTTB”) technology in the city of Krasnodar.

The powerful fibre-optic network, currently under construction in Krasnodar, will be used to provide broadband internet access at speeds of up to 100 Megabits per second, both basic and expanded cable TV offerings, as well as IP-telephony. The total investments in the project amount to US$ 4 million in 2008.

DTN has already soft-launched cable TV services covering 1.3 thousand flats in Krasnodar, with the commercial launch of the services expected during autumn of 2008.

Victor Koresh, Vice President for the Development of the Group’s Regional Operations, commented: “Comstar will provide triple-play services in Krasnodar and other cities where we are present in the Southern Federal District of Russia. We are currently building similar networks in the city of Sochi, as well as in Rostov-on-Don, where we already have over 40 thousand broadband subscribers and over 115 thousand cable TV subscribers. In addition, the STREAM-TV subsidiaries, which are now operating under the management of Comstar, will enable us to achieve significant synergies and secure a leading position in the telecommunications markets in the cities of the South of Russia where we have a presence.”

Mikhail Monastyrsky, General Director of DTN, added: “The FTTB network will cover almost all multi-storey buildings in Krasnodar and we expect to provide our services to over 75 thousand local households by the end of 2009. We intend to offer convenient package tariff plans, expand our subscriber base and implement customer loyalty support programmes.”