OREANDA-NEWS. July 16, 2010. “COMSTAR – United TeleSystems” OJSC (“Comstar” –  LSE: CMST), the largest integrated fixed – line telecommunications provider in Moscow and 82 Russian cities, announced that it has received from Mobile TeleSystems OJSC (“MTS” – NYSE: MBT), the leading telecommunications provider in Russia and the CIS, the MTS Voluntary Tender Offer (“VTO”) to acquire up to 37,614,678 Comstar ordinary shares (representing 9.0% of Comstar’s issued share capital, and including shares underlying Comstar Global Depositary Receipts (“GDR’s”) that MTS does not already own for RUR 220.0 per Comstar share. The launch of the VTO follows the announcement on June 25, 2010 that the Boards of Directors of MTS and Comstar had approved and recommended the merger of MTS and Comstar. The VTO documentation was then filed by MTS with the Federal Service for Financial Markets (“FSFM”), which has now completed its statutory review. MTS currently owns 61.97% of Comstar, or 64.03% when excluding treasury shares, and consolidates Comstar in its financial results.

As announced on June 25, 2010, the implied VTO price per Comstar GDR of USD 7.16[1] represents a 13.1% premium to the three month volume-weighted average trading price of the Comstar GDR on the London Stock Exchange up to the close of trading on June 22, 2010.

The Comstar Board of Directors will now review the VTO documentation and decide upon its recommendation to Comstar shareholders regarding the VTO. Comstar will then deliver the documentation, together with its Board of Directors’ recommendation, to Comstar ordinary shareholders on the register as at the end of the trading session on July 13, 2010 ,and to Comstar GDR holders via Deutsche Bank (the depositary bank for Comstar’s GDR programme). Comstar shareholders who subscribe to the VTO will receive a pro rata cash allocation in the event of over-subscription. The VTO period will remain open for 70 days from the date of MTS VTO receipt by Comstar until the end of day on September 21, 2010.

J.P. Morgan plc provided a fairness opinion to the Comstar Special Committee of Independent Board Directors. Linklaters CIS is acting as legal advisor to Comstar.

In accordance with Russian law an announcement was made to the Russian market this morning, the required form of which has been translated and appended to this press release.

 [1] Based on the RUR/USD exchange rate of RUR 30.7267 per USD 1 as of June 22, 2010.