Moscow, Russia – July 15, 2010 – COMSTAR – United TeleSystems JSC (“Comstar” –  LSE: CMST), the largest integrated fixed–line telecommunications provider in Moscow and 83 Russian cities, announces that its Board of Directors has recommended today that its shareholders accept the Voluntary Tender Offer (“VTO”) by Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, and tender up to 37,614,678 Comstar ordinary shares representing up to 9.0% of Comstar’s issued share capital and including shares underlying Comstar Global Depositary Receipts (“GDRs”) for RUR 220.0 per Comstar share. As previously announced, Comstar received the VTO from MTS on July 13, 2010 following the completion of a statutory review of the documentation by the Federal Service for Financial Markets (“FSFM”). The VTO follows the announcement made on June 25, 2010 that the Boards of Directors of MTS and Comstar had recommended the merger (“prisoedinenie” under Russian law) of MTS and Comstar. MTS currently owns 61.97% of Comstar, or 64.03% when excluding treasury shares, and consolidates Comstar in its financial results.

As announced on June 25, 2010, the implied VTO price per Comstar GDR of USD 7.16^[1] represents a 13.1% premium to the three month volume-weighted average trading price of Comstar GDRs on the London Stock Exchange up to the close of trading on June 22, 2010.

The VTO documentation together with the Board of Directors’ recommendation will now be delivered to Comstar shareholders which were on the register as at the end of the day on July 13, 2010 and to Comstar GDR holders, via Deutsche Bank (the depositary bank for Comstar’s GDR programme) (the “Depositary”) in accordance with the terms of the relevant GDR programme. Comstar shareholders who subscribe to the VTO will receive a pro rata cash allocation in the event of over-subscription. The VTO acceptance period for shareholders will remain open for 70 days from the date Comstar received the VTO, until the end of the day on September 21, 2010.^[2]

Thomas Holtrop, Chairman of the Comstar Special Committee of Independent Board Directors (“Comstar Special Committee”), commented: “The Board’s recommendation of the merger with MTS was based on the review and recommendation of the terms of the merger made by the Comstar Special Committee.  The VTO is a part of this process and the Board of Directors’ recommendation regarding the VTO is based on the Comstar Special Committee’s evaluation and recommendations. We believe that the VTO provides Comstar minority shareholders with an attractive opportunity to tender their shares at a fair premium to the historic average trading price of Comstar GDRs”.

J.P. Morgan plc provided a fairness opinion to the Comstar Special Committee and is acting as its financial advisor. Linklaters CIS is acting as legal advisor to Comstar.

Documentation regarding the VTO is available at https://www.comstar-uts.ru/en/for_investors/mts/info/

^[1] Based on the RF Central Bank RUR/USD exchange rate of RUR 30.7267 per USD 1 as of June 22, 2010.

^[2] The VTO acceptance period for GDR holders will be shorter in duration and end earlier in September so as to allow the Depositary to reconcile the additional time required to realize the transaction and satisfy Russian legal requirements.  The exact date and procedure for GDR holders to tender will be separately communicated to GDR holders by the Depositary.