Moscow, Russia - March 3, 2006 - JSC "COMSTAR - United TeleSystems" ("Comstar UTS") (LSE: CMST), today announced that it has acquired an additional 3.82% of ordinary shares in Moscow ?ity Telephone Network (MGTS) for a total cash consideration of US$ 71.5 million (RUR 2.01 billion). Comstar UTS has thereby increased its equity stake in MGTS to 53.04%.  The increase in shareholding has no effect on Comstar UTS' accounting treatment of the holding, as MGTS' results are already fully consolidated by Comstar UTS.   

The shares were acquired through a series of transactions subsequent to the mandatory tender offer made by Comstar UTS to MGTS minority shareholders announced in December 2005.

The acquisition was funded by the US$ 150 million syndicated credit facility previously obtained by Comstar UTS.  US$ 140 million of the loan obtained has now been utilized primarily to finance the acquisition of MGTS minorities.