Comstar 2Q09: Pay TV subscribers down in Moscow; flat in the Regions

MOSCOW, Russia — “COMSTAR – United TeleSystems” OJSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, today announced its unaudited consolidated US GAAP financial results for the quarter and six months ended June 30, 2009.

Moscow (COMSTAR IPTV)

The number of triple-play subscribers (voice, broadband internet & pay-TV) decreased by 3% quarter on quarter to 133 thousand due to customers optimizing their spending in the adverse economic climate, while pay-TV ARPU in rubles increased by 11% over the same period due to the churning out of lower ARPU subscribers using mass-market TV packages with a limited number of channels.

The Regions (STREAM-TV cable TV)

Over 50% of the potential households, or 2.0 million active subscribers, were using pay-TV services by the end of the second quarter of 2009. This included 374 thousand subscribers to low-cost packages comprising 20 TV channels. Pay-TV subscribers are more likely to switch to extended offerings, which drives pay-TV premium ARPU growth.

Pay-TV subscribers (000s):

          Q2 2009  Q2 2008   Growth  Q1 2009   Growth
          -------  -------  -------  -------  -------
Moscow        133      147    (10%)      137     (3%)
Regions     1,953      142   1,278%    1,953       0%

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