August 9, 2010, Moscow: COMSTAR – United TeleSystems (COMSTAR-UTS, LSE: CMST), a leading provider of integrated telecom services in Russia and the CIS, announces that the Central Branch of COMSTAR-Regions (100% subsidiary of COMSTAR-UTS) has set upon implementation of a program to construct and upgrade its networks in the Central Federal District using FTTB technology.

The Branch intends to upgrade existing and build new networks using FTTB (Fiber-to-the-Building) and to provide access to the high-speed Internet and pay TV to 500,000 apartments in the District. This technology features high bandwidth, reliability and short time to market for new telecom services. FTTB networks enable a wide range of services, including data, voice, broadband, video streaming, video on demand (VoD) and virtual cinema, video surveillance, video calls, etc. Besides, the subscribers of the advanced network will be able to watch more channels with enhanced quality.

Evgeny Lapshin, Director of the Central Branch of COMSTAR-Regions, says: “In the nearest future we will commercially launch a network covering over 50,000 apartments in Orel and over 20,000 apartments in Kursk. Other capacities will be launched step-by-step till the end of 2010. I am sure that the large-scale upgrade of the infrastructure and new networks will strengthen our positions in the Central Region, attract new subscribers and substantially increase our share on the telecom markets in the cities and towns of our presence.”

Recall that the Central Branch provides services in the Central Federal District excluding Moscow and Moscow Region. COMSTAR networks currently operate in Voronezh, Ryazan, Ivanovo, Tver, Kursk, Kaluga, Orel, Smolensk, Tambov, Yaroslavl. As of the end of 1Q2010 the total subscriber base of the Central Branch makes over 470,000 users. For a year the Internet service subscriber base has grown by 120% including M&A deals.