COMSTAR-United TeleSystems OJSC First Quarter 2008 Financial Results

Moscow residential broadband internet subscriber base up 77% year on year and 15% quarter on quarter to 750 thousand including 134 thousand triple-play (voice + broadband internet + pay-TV) subscribers

MOSCOW, Russia — “COMSTAR – United TeleSystems” OJSC (“Comstar” or “the Group”) (LSE: CMST), the leading integrated telecommunications operator in Russia and the CIS, today announced its unaudited consolidated US GAAP financial results for the three months ended March 31, 2008.

Operating Highlighgts

“¢ Moscow residential broadband internet subscriber base up 77% year on year and 15% quarter on quarter to 750 thousand including 134 thousand triple-play (voice + broadband internet + pay-TV) subscribers
“¢ Regional residential broadband internet subscriber base up twenty times year on year and 19% quarter on quarter to 40 thousand, regional pay-TV subscriber base increased to 107 thousand

Broadband Business in Moscow & the Regions

Comstar’s residential broadband subscriber base in Moscow grew by 83% year on year to 750 thousand by the end of the quarter. 99 thousand residential broadband subscribers were added in the first quarter, with 90% of all subscribers choosing tariff plans with speeds of not less than 1 megabit per second. This growth was driven primarily by the continuing success of the “Broadband in every Home” campaign launched in November and the active engagement of retail chains at the point of sale. The new broadband strategy provides a significant competitive advantage and a platform for delivering a range of value-added services. The number of pay-television subscribers in Moscow increased by 30% year on year to 134 thousand homes, and from 122 thousand homes at the end of 2007.

The selective modernization of the “last mile”, using “fiber to the curb” and ADSL 2+ technologies, provides extra bandwidth and additional capacity to deliver high-speed Internet at 24 megabits per second and new value-added services such as High Definition Television. New high-speed Internet and HDTV services have been tested since the end of February and are expected to be commercially launched on the July 1 for the modernized part of the MGTS network in Moscow. Comstar’s deployment of a mobile WiMAX network in Moscow in late 2008, in cooperation with Intel, will provide even greater flexibility for users.

Comstar will therefore be able to offer an unrivalled quintuple-play service offering – local and long distance telephony, unlimited wire-line broadband Internet and HDTV – all in the home – and WiMAX mobile Internet access from a laptop when on the move.

Comstar’s regional broadband subscriber base outside Moscow grew year on year from 5 thousand customers to 52 thousand users by the end of March, up from 44 thousand customers at the end of the year. The number of regional residential broadband subscribers increased year on year from 2 thousand customers to 40 thousand customers and up from 33 thousand subscribers at the end of 2007. The number of regional pay-TV subscribers increased by 9% quarter on quarter from 102 thousand to 107 thousand homes. Comstar’s objective is for the regional residential and corporate broadband subscriber base to exceed 100 thousand users by the end of 2008.

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