Moscow, Russia – October 26, 2006 – JSC “COMSTAR – United TeleSystems” (“Comstar UTS”) (LSE: CMST), the leading provider of integrated communications services in Moscow, today announced that it acquired 1,605,500 ordinary shares in Moscow City Telephone Network (MGTS). The acquired shares represent 2.01% of the Company’s outstanding ordinary shares or 1.68% of the Company’s total shares. The shares were purchased at market price. Upon completion of this transaction, Comstar UTS interest in MGTS amounts to 66.88% of the Company’s ordinary shares or 55.73% of the Company’s total shares. Commenting on the purchase of shares, Eric Franke, President and Chief Executive Officer of Comstar UTS, said: “The acquisition of additional shares follows on the second public share purchase offer and is in line with the strategy of consolidating our shareholding in Moscow City Telephone Network. We believe that further integration of our companies will produce significant synergies for the benefit of our shareholders”.