Comstar UTS: Comstar to Convert Thirty Six Million Ruble Bonds

“COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that its Board of Directors has approved the offering of RUB 36 million of interest-bearing, non-bearer, ruble-denominated bonds.

The bonds are being issued in order to replace bonds previously issued by Comstar subsidiary Konversia-svyaz. Konversia-svyaz was acquired by Comstar in December 2005 and, in line with the decision taken on August 30, 2007, is being merged with Comstar. The existing bonds will be converted into the newly issued bonds on a one for one basis.

Comstar will offer 119,916 series “A” 10% bonds due November 29, 2015; 119,988 series “B” 8% bonds due August 21, 2016; and 120,000 series “C” 5% bonds due June 28, 2022. These bonds will have a par value of RUB 100.

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

Comstar UTS is the leading fixed-line telecommunications company in Moscow, both in terms of revenues and subscribers. Comstar UTS provides voice, data, Internet, pay-TV and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and exclusive last mile access to 98% of Moscow households. The Company also offers communications services in five Russian regions and certain CIS countries. Comstar had 3.6 million residential subscribers in Moscow, 452,600 broadband internet subscribers in Moscow, 108,600 corporate subscribers in Moscow, and approximately 94,100 regional and international subscribers, as at September 30, 2007. Comstar UTS reported operating revenues of US$ 1,080 million and a 43% OIBDA margin for the nine months ended September 30, 2007. Comstar GDRs are listed under the symbol “CMST” on the London Stock Exchange.

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.

Contacts

Comstar UTS
Masha Eliseeva
Tel: +7 985 997 0852
ir {at} comstar-uts(.)ru
or
Shared Value Limited
Matthew Hooper
Tel. +44 (0) 20 7321 5010
comstar {at} sharedvalue(.)net