Moscow, Russia – May 27, 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 a meeting of the Board of Directors of Moscow City Telephone Network (“MGTS”), held on May 26, 2010, has proposed  that the MGTS Annual General Meeting of Shareholders approves a dividend payment of RUR 49.44 per preferred share for the full year 2009. The Board of Directors has recommended that no dividend be paid to holders of ordinary shares.

In accordance with MGTS’ charter, the total dividend to preferred shares will amount to RUR 789,351,624, or 10 per cent of the net income for the full year 2009. MGTS reported a net income of RUR 7,892 thousand for the full year 2009 under Russian Accounting Standards (RAS).

The meeting of the Board of Directors of MGTS also discussed the issue of a preliminary approval of the Annual Report and the accounts of the company, as well as the distribution of the profits and losses for the full year 2009.

The Annual General Meeting of Shareholders of MGTS will be held on June 28, 2010, and will consider the above proposals. Shareholders who are registered in the Company’s registry by May 11, 2010 will have the right to attend the Annual General Meeting.