Moscow, Russia - January 11, 2006 - Sistema (LSE: SSA), the largest private sector consumer services company in Russia and the CIS, announced today that its fixed-line telecommunications provider subsidiary Comstar UTS has acquired a 100% stake in CTK Contrast-Telecom - a leading alternative fixed-line operator in Sergiev Posad, one of the largest districts in the Moscow Region.

CTK Contrast-Telecom provides local fixed-line voice service, data transmission, internet access and a range of value-added services. The company operates a proprietary telecommunications network, controlling about 25% of the local fixed voice market and over 50% of the Internet access market in Sergiev Posad. The company's revenues for 2005 amounted to US$2m, of which about 49% comes from the corporate clients, with OIBDA of approximately US$1m.

The acquisition of one of the leading alternative telecommunications operators in the Moscow Region is the next step in Comstar UTS' expansion strategy, allowing it to further improve its coverage of the Moscow Region. The company has set up a regional office at the end of 2005 to coordinate its operations in twelve districts of the Moscow Region.