Comstar Broadband Internet Subscriber Base Almost Doubles to 695,000 in Moscow

Moscow, Russia — “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE: CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that its broadband internet subscriber base almost doubled year on year to 695,000 users in Moscow by the end of 2007. 228,000 net new subscribers were added in the fourth quarter alone, which was nearly five times as many net additions as in the fourth quarter of 2006.

The 651,000 residential subscribers accounted for 94% of Comstar’s broadband subscriber base at the year end. 198,000 net new residential broadband subscribers were added in the fourth quarter, including more than 66,000 new subscribers signed up by MGTS. Internet connection speeds of 1 Megabit per second or above were chosen by 97% of the new broadband residential subscribers signed up during the fourth quarter of 2007.

The number of pay-TV subscribers increased by 36,100 year on year to 119,400 subscribers in Moscow by the end of 2007.

The number of broadband sales points increased by 32%, from 900 to 1,186, during 2007. MGTS subscribers are now offered the opportunity to sign-up for internet access through the telephony technical support teams.

The increase in the subscriber base reflected the successful implementation of Comstar’s revised broadband strategy. The Group companies are focused on subscriber acquisition, improving the quality of customer service, simplifying the sign-up and connection process, as well as enhancing existing and launching new sales channels.

In addition, MGTS started offering broadband internet services at the end of September 2007, providing credit-based tariffs and introducing single billing for residential telephony and broadband services.

The number of broadband access points used by corporate subscribers in Moscow also more than doubled to 44,000 during 2007, and partly reflected the change in the way that corporate users are serviced with effect from the beginning of the fourth quarter. Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The combined efforts of our operating businesses and the efficient coordination of their activities enabled us to achieve this substantial acceleration in customer acquisition levels. We expect to continue to grow the subscriber base in 2008, and we are simultaneously focused on increasing customer loyalty and ARPU levels moving forward. In 2008 we will concentrate on upgrading the last mile and launching unique HDTV services in Moscow. We also expect to see a significant growth in the broadband subscriber base in the Russian regions, which already exceeded 40,000 users by the end of 2007.”