Comstar Soft Launches Moscow - Rostov-on-Don Backbone Network

MOSCOW--(BUSINESS WIRE)--“COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST.L), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced that it has soft launched a backbone multiservice fibre-optic network connecting Moscow and Rostov-on-Don.

The network construction commenced in 2008 on the basis of ECI equipment and applied Dense Wavelength Division Multiplexing technology. The new telecommunications network, spanning approximately 1,350 km and with a data transmission speed capacity of 10 Gigabits per second, passes through Tula, Lipetsk, Voronezh, Kamensk-Shakhtinsk, Shakhty and Novocherkassk. The overall investment in the project amounted to over RUR 146 million (US$ 4.6 million).

Comstar’s transport optic infrastructure enables transmission of both voice and data telecommunication traffic on an IP protocol basis. Comstar is therefore able to provide its local subscribers with a full range of fixed-line telecommunications services, including long-distance connection, broadband internet access and pay-TV.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The soft launch of the backbone multiservice network is a milestone in the implementation of our transport network development programme. The proprietary backbone network is a prerequisite for successful operations of a national telecommunications operator. The overall concept of transport network development was approved by the Comstar Science and Technology Committee in November 2008, and we are consistently working on its implementation. Our proprietary backbone networks will allow us to significantly reduce our costs related to channel rent, and expand our presence in long-distance connection segments, such as exchange of traffic between operators and international transit. Our reduced dependence on the large backbone network operators lending us their networks will enable us to decrease the costs of traffic transmission and, through that, reduce the service costs for our regional subscribers.”

For further information, please visit www.comstar-uts.com.

Comstar-UTS is the leading fixed-line telecommunications company in Moscow. Comstar provides voice, data, television and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and exclusive last mile access to 97% of Moscow households. The Company also offers communications services in five Russian regions, Armenia and Ukraine. Comstar had 3.6 million residential subscribers and 795 thousand residential broadband internet subscribers in Moscow, as well as 310 thousand residential regional and international broadband internet subscribers and 1.9 million residential regional pay-TV subscribers at the end of March 2009. Comstar generated US$ 334.4 million of revenues and a 37.8% OIBDA margin for the three months ended March 31, 2009. Comstar’s Global Depositary Receipts are listed on the London Stock Exchange (ticker: CMST).

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: +7 985 997 0852
ir@comstar-uts.ru
or
Shared Value Limited
Matthew Hooper
Tel. +44 (0) 20 7321 5010
comstar@sharedvalue.net