Monday, September 29th, 2008 

COMSTAR Increases Data Transmission Speed by Three Times to 20 Mb/Sec

MOSCOW — “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE:CMST), the largest integrated telecommunications provider in Moscow and 67 Russian cities, has introduced new speed tariff plans, allowing for the data transmission speed of up to 20 Megabits per second, and fully launched ‘STREAM’ branded High-Definition Television (“HDTV”) services in Moscow in the modernized parts of the MGTS network.

The offering of broadband internet access with the data transmission speed of 20 Megabits per second and HDTV services was enabled by the ongoing modernization of the MGTS network. The two year network modernization programme launched in February 2008 is modernizing MGTS’ unique ‘last mile access’ using fiber-to-the-curb technology. At present, equipment had been installed in more than 200 curbs out of total 3,000 curbs which will be modernized by the end of 2009.

The tariff plans for the broadband internet access with the data transmission speed of 15 Megabits per second and 20 Megabits per second are offered for subscription fees of RUB 900 (US$ 36) per month and RUB 1,000 (US$ 40) per month respectively. In addition, Comstar launched HDTV package comprising three pay-TV channels – MelodyZen (the relaxation channel), Voom TV (the multi-themed channel) and Luxe TV (the luxury lifestyle and fashion channel) for RUB 200 (US$ 8). Comstar also started offering video-on-demand of HD quality for RUB 100 (US$ 4) per movie. The Group launched additional bundle service offerings, e.g. broadband internet access with the data transmission speed of 10 Megabits per second, IP-TV and HDTV packages for RUB 1,250 (US$ 50).

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The introduction of higher priced tariffs is in line with the move to the second phase of our broadband strategy following a rapid increase in broadband subscriber base in Moscow. We can already see the first results of the ongoing modernization of the MGTS network. We have increased the maximum data transmission speed by three times and enabled our subscribers to fully enjoy the technical possibilities of the TV sets which support the HD format. We expect to provide the access to these new services to up to 80% of Comstar subscribers in Moscow next year.”

Sergey Nazarov, Comstar’s Vice President for Marketing, added: “HDTV is the television format of the future and is a revolutionary step in the development of television, with HDTV viewers enjoying a superior picture quality. We are pleased that the ongoing network modernization has enabled us to offer this additional service, and we fully intend to expand the number of HDTV channels with an enhanced range of packages.”