Before the end of summer 2009, Privolzhsky macro branch will be incorporated in PFD following the process of regional business restructuring and establishment of a single center to consolidate regional assets of COMSTAR-UTS Group of companies. This macro branch will include all subsidiaries and affiliates of OAO COMSTAR-UTS and ZAO STREAM-TV (100% subsidiary of COMSTAR-UTS) in this federal district.

Currently, COMSTAR-UTS Group of companies provides telecommunication services in 14 cities of PFD: Saratov, Engels, Balakovo, Nizhny Novgorod, Dzerzhinsk, Izhevsk, Ulyanovsk, Orenburg, Buzuluk, Buguruslan, Sorochinsk, Pervomaysky, Samara and Togliatti. Now, the Group is presented in these cities both in branches and subsidiaries of COMSTAR-UTS (in Saratov, Samara and Orenburg), and in those of ZAO STREAM-TV. Simultaneously with COMSTAR-Region, Privolzhsky macro branch will be set up. Telecom service centres will be arranged in large cities of Company’s presence based on former branches: Balakovsky, Izhevsky, Orenburgsky, Nizhegorodsky, Samarsky and Ulyanovsky. In other cities of Company’s presence, telecom divisions will be arranged. The center of macroregion branch will be located in Saratov.

“Actually, it is since the beginning of this year that we are gradually shaping up our macro regional structure of our regional business”, - says Viktor Koresh, COMSTAR-UTS Vice President for Regional Development and Director General of ZAO STREAM-TV. – From the very start we concentrated our efforts to re-organize the structure on a “one federal district – one branch” basis, thus we have implemented a number of relevant organizational and staff changes. In all macro regions, we are planning to introduce common process standards and common approaches to customer care service – both corporate and private. As a result, inhabitants of every city of Group’s presence will in the long term be able to use Triple play services, i.e. telephone communication – local, zonal and long distance, Internet access and pay-TV”.

At present, all COMSTAR-UTS and STREAM-TV branches in PFD are headed by Ivan Gavriletsky, Director of COMSTAR-UTS branch in Saratov.

“A decision to locate the macro branch center in Saratov has reasonable grounds – this is one of the largest cities in Privolzhsky Federal District. Here we have most of our cable TV and telecom subscribers, with substantial number of Internet broadband access users. We are present in the city taking our share in the market of both private and corporate customers”, - says Ivan Gavriletsky. – May I also stress that Samara is still one of the key cities in the region, the leading player of telecom services market for corporate customers offering a complete range of up-to-date communication services to its subscribers”.

In PFD cities of presence for COMSTAR-UTS Group of companies, there are over 6.5 million inhabitants and about 200 thousand companies are registered. The region is a well developed industrial structure, featuring large share of high-technology industries, as well as aggressive engineering of residential and office buildings. In some cities, COMSTAR-UTS Group of companies accounts for the largest market share. According to rough estimates of COMSTAR-UTS Group of companies, its share in cable TV market of Balakovo is about 98%, in Dzerzhinsk – nearly 99%, in Ulyanovsk – 80 %, in Nizhny Novgorod – about 65 %. Companies of the COMSTAR-UTS Group are also actively introducing Internet broadband access (IBA) services: in some cities, they are well developed (for instance, a share of the IBA market in Ulyanovsk is 51 %, in Saratov – 29 %, in Izhevsk – more than 15 %), while in some cities, these services are just being implemented after upgrade of the data and TV network. For example, in June, COMSTAR-UTS launched broadband Internet in Balakovo.

As of the end of Q1 2009, the subscriber base of telecom services by COMSTAR-UTS Group of companies in Privolzhsky Federal District was more than 41 thousand private users and about 13 thousand corporate users. The number of pay-TV service subscribers now exceeds 494 thousand. Whereas the number of broadband access subscribers exceeding 71 thousand, 67 thousand individual users inclusive.

Near-term plans of COMSTAR-UTS Group of companies in Povolzhye market include completion of reorganization and final shaping up of Privolzhsky macro branch. Besides, the Group of companies will actively develop Double- and Triple-play services. To enable this, all large cities of Company presence shall see processes of selective upgrade for cable TV networks, FTTB networks (Fiber-to-the Building) being laid at the same time. In 2009-2010, the Group of companies plans to enlarge IBA subscriber base, develop increased loyalty programs for subscribers of other services – telecom and cable TV, in a number of regions – to integrate services of Internet television (IP-TV), and launch broadband Internet access services in regions where this service is not yet being provided (particularly, in Dzerzhinsk). In a number of regions, a system of network monitoring and 24/7 technical support will be implemented. In order to promote its services, COMSTAR-UTS intends to develop agency and dealership patterns of sales, enable direct sale channels and elaborate issues of service provision using web-based resources. COMSTAR-UTS is also working on issues of enhanced user-friendliness of services, including development of a network of customer care centres and service payment facilities using networks of electronic payment system terminals or scratch cards. In the cities where COMSTAR-UTS and STREAM-TV operate concurrently (for example, in Saratov and Engels), common sales outlets and customer care centres have been set up from the beginning of this year.

COMSTAR-UTS are an operator of interurban and international communication and in accordance with the license provisions the Company has arranged connection points in all regions of PFD. At present, the operator provides a complete range of telecom services (from local to zone communication) in Saratov and Orenburg regions. Plans for the year 2009 are to commission zone communication center in Samara.