“COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE:CMST), the leading integrated telecommunications operator in Russia and the CIS, today announced that it has completed the acquisition of 100% of the share capital of Interlink Group for a total cash consideration of RUB 200 million (approximately US$ 8.5 million1). The Group comprises Intersvyaz Service, the alternative fixed-line telecommunications operator, and Inter-TV Media, the cable TV operator, which operate under the unified brand “Interlink” in Ryazan and the Ryazan region.

The Interlink Group is one of the leading players in the alternative fixed-line communications market in Ryazan and the Ryazan region. Intersvyaz Service provides telephony services, internet access, leased channel services, design and the development of fibre-optic and other cable networks. The company serviced over 15,000 telephone numbers, including 90% of numbers for residential subscribers, and provided internet access to over 2,000 subscribers, as at the end of 2007. Inter-TV Media is a cable TV operator which provided services to over 20,000 cable TV subscribers as at the end of 2007, including analogue and digital TV services, as well as video surveillance solutions. The Group’s fibre-optic network covers over 95% of the territory of Ryazan. The Group companies obtained licenses for the 2.5-2.7 Ghz frequency range, which will provide for the development of WiMAX-based services in the region.

The Group reported revenues of US$ 4 million, up by 45% year-on-year, with OIBDA of US$ 1.1 million and an OIBDA margin of 27% as at December 31, 2007.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The Interlink Group is a company with significant growth potential. The Group operates in the areas of the telecommunications industry which are of high priority for Comstar. The Group is expected to launch wireless broadband services based on WiMAX technology in the future. The announced deals are in line with our strategy to expand our operations in the Russian regions, through the acquisitions of leading regional telecommunications operators. We are strengthening our position in the Central Federal District, one of the most economically developed districts in Russia. We intend to expand our service offerings in the Ryazan region, providing broadband internet access, TV services and long-distance connection.”

In addition to the Ryazan region, Comstar currently operates in the Ivanov and Kaluga regions of the Central Federal District of Russia.

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

Comstar UTS is the leading fixed-line telecommunications company in Moscow. Comstar provides voice, data, television and other value-added services to residential and corporate subscribers and operators, using its extensive backbone network and exclusive last mile access to 97% of Moscow households. The Company also offers communications services in five Russian regions, Armenia and Ukraine. Comstar had 695,000 broadband subscribers in Moscow. Comstar had 3.6million residential subscribers in Moscow, including 651,000 residential broadband internet subscribers in Moscow, 102,000 corporate subscribers in Moscow, and approximately 448,000 regional and international subscribers, including 33,000 residential broadband internet subscribers and 102,000 residential pay-TV subscribers, at the end of 2007. Comstar generated US$ 1,562.4 million of revenues and a 42.5% OIBDA margin for the twelve months ended December 31, 2007. Comstar’s Global Depositary Receipts are listed on the London Stock Exchange (ticker: CMST).

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.

1 Based on the Russian Central Bank exchange rate as at May 27, 2008