OREANDA-NEWS. On 31 August 2009 “COMSTAR – United TeleSystems” OJSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 69 Russian cities, announced its unaudited consolidated US GAAP[1] financial results for the quarter and six months ended June 30, 2009.

SECOND QUARTER HIGHLIGHTS

Consolidated revenues up 19% year on year and 3% quarter on quarter in ruble terms to USD  363.6 million[2]

OIBDA[3] up 28% year on year and 12% quarter on quarter in ruble terms to USD  149.3 million with increased OIBDA margin of 41.1%

Net income attributable to Comstar-UTS up 36% year on year and doubled quarter on quarter in ruble terms to USD  30.0 million

Cash flow from operations up 12% year on year and down 4% quarter on quarter in ruble terms to USD  102.2 million

Cash capital expenditure[4] of USD  15.5 million

Total assets of USD  3.7 billion

Residential broadband ARPU in Moscow up 2% quarter on quarter to RUR 330

Residential broadband subscriber base in Moscow up 11 thousand since June 30, 2009 to 802 thousand as at August 16, 2009

DLD/ILD traffic passed through Comstar’ proprietary network increased by 50% quarter on quarter to 71.8 million minutes

HALF YEAR HIGHLIGHTS

Consolidated revenues up 15% year on year in ruble terms to USD  698.0 million

OIBDA up 15% year on year in ruble terms to USD  275.7 million with stable OIBDA margin of 39.5%

Net income attributable to Comstar-UTS down 28% year on year in ruble terms to USD  42.6 million

Cash flow from operations up 3% year on year in ruble terms to USD  201.4 million

Cash capital expenditure of USD  75.2 million

DELIVERY IN LINE WITH STRATEGIC GOALS

Broadband development

   - Commercial launch of mobile WiMax network in Moscow

   - 1,000 “Comstar-FON” WiFi hot spots in Moscow

   - Residential broadband sales launched in Tver, Kaluga, Tambov, Balakovo and Mirny

Restructuring of regional operations

   - 7 largest regional subsidiaries merged into “Comstar-Regions” in August 2009

   - STREAM-TV headcount reduced by 12% to 2.9 thousand from since the beginning of 2009

   - New organizational structure for Comstar-Regions created with common standards for cash management, budgeting, financial and management reporting introduced across STREAM-TV Group

42% increase in weighted average regulated per minute ruble charge for operators interconnected to Comstar network in Moscow from the second quarter of 2009

17% increase in weighted average regulated per minute ruble charge for operators interconnected to MGTS network in Moscow from September 2009

[1] Except for the presentation of comparative financial information that has not been restated to reflect the retrospective combination of the financial statements of STREAM-TV, which is a departure from US GAAP (see detailed explanation below)

[2]  The average exchange rate for the periods were:

32.21 Russian Rubles (RUR) per USD  1 in the second quarter of 2009; RUR 33.93 per USD  1 in the first quarter of 2009; RUR 23.63 per USD  1 in the second quarter of 2008; RUR 33.07 per USD  1 in the first six months of 2009; and RUR 23.94 per USD  1 in the first six months of 2008

[3] Here and below, please refer to Attachment A to this statement for a full definition of OIBDA

[4] Here and below, cash capital expenditure comprises purchases of property, plant and equipment, and intangible assets