MOSCOW--(BUSINESS WIRE)--“COMSTAR – United TeleSystems” JSC (“Comstar”) (LSE: CMST.L), the leading combined telecommunications operator in Russia and the CIS, today announced that it has completed the acquisition of 100% of the share capital of Sochitelecomservice, an alternative telecommunications operator in the Russian city of Sochi, for a total cash consideration of US$ 0.75 million.
Founded in 2003, Sochitelecomservice provides fixed-line telephony services, Internet access and line leasing to corporate customers in Sochi. The Company’s customers include large regional companies, as well as the representative offices of national companies such as OJSC Lazurnaya, Sheksna resort, the Savings Bank of the Russian Federation (Sberbank) and Vneshtorgbank. Sochitelecomservice reported revenues of US$ 0.4 million for the twelve months ended December 31, 2006. The number capacity of Comstar’s Southern Branch will increase by 45% to a total of 16,000 telephone numbers as a result of the acquisition.
Sergey Pridantsev, President and CEO of Comstar UTS, commented: “The acquisition of Sochitelecomservice reflects our strategy to establish market leading positions for Comstar’s regional alternative operator subsidiaries. Comstar’s Southern Branch will now become the largest alternative operator in Sochi. This acquisition will both strengthen our local market position and increase profitability. We will integrate Sochitelecomservice into our Southern Branch, which serves the Sochi representative offices of our Moscow based customers. The combination of the businesses will also accelerate the development of our broadband network and enhance the provision of services in cooperation with our sister Sistema Group companies for projects relating to the XXII Olympic Winter Games to be held in Sochi in 2014.”
For further information, please visit www.comstar-uts.com.
Comstar UTS is the leading combined telecommunications operator in Moscow and the Moscow region, both in terms of revenues and subscribers. Comstar UTS provides voice, data, Internet, Pay-TV and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and unique last mile access to 98% of Moscow households. The Company also offers communications services in several Russian regions, CIS and Eastern European countries. Comstar had 3.6 million MGTS subscribers, almost 40,000 Comstar Moscow subscribers, nearly 500,000 Comstar Direct Internet subscribers, and over 90,000 regional and international subscribers, as at March 31, 2007. Comstar UTS reported increased operating revenues of US$ 329 million and consolidated assets of US$ 3.67 billion for the three months ended March 31, 2007. Comstar securities are listed under the symbol “CMST” on the Moscow Stock Exchange and the London Stock Exchange.
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Comstar UTS. You can identify forward looking statements by terms such as “expect,” “believe,” “anticipate,” “estimate,” “intend,” “will,” “could,” “may” or “might”, the negative of such terms or other similar expressions. Comstar UTS wishes to caution that these statements are only predictions, and that actual events or results may differ materially. Comstar UTS does not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in projections or forward-looking statements of Comstar UTS, including, among others, general economic conditions, the competitive environment, risks associated with operating in Russia, rapid technological and market change in the industries Comstar UTS operates in, as well as many other risks specifically related to Comstar UTS and its operations.
Comstar UTS
Masha Eliseeva
Tel: +7 495 950 02 27
Mobile
+7 985 997 08 52
Eliseeva_ms@comstar-uts.ru
or
Shared
Value Limited
Larisa Kogut-Millings
Tel. +44 (0) 20 7321 5037
comstar@sharedvalue.net
