Comstar Launches HDTV

MOSCOW--(BUSINESS WIRE)--“COMSTAR – United TeleSystems” JSC (“Comstar” or “the Company”) (LSE:CMST), the leading combined telecommunications operator in Russia and the CIS, today announced that Comstar-Direct, its majority owned subsidiary and the largest broadband service provider in Moscow operating under the “STREAM” brand, has soft-launched the High-Definition Television (“HDTV”) service.

“The Moscow broadband market has reached an advanced stage of development. Today, our subscribers are interested not only in access to high speeds, but also in exciting and high-quality content. We are planning to provide our clients with both HDTV and high-speed internet access.”

The soft-launch will last till June 1, 2008, and involves an access to four TV channels –Discovery HD, MelodyZen, Luxe TV and Voom HD – as well as a package of 10 films using the video-on-demand service. The number of available TV channels and films will be expanded in the near future.

Sergey Pridantsev, President and Chief Executive Officer of Comstar UTS, commented: “The Moscow broadband market has reached an advanced stage of development. Today, our subscribers are interested not only in access to high speeds, but also in exciting and high-quality content. We are planning to provide our clients with both HDTV and high-speed internet access.”

Once the HDTV service is fully launched, subscribers will be offered a variety of tariff plans which will include high-speed internet access (with speeds from 1 Mbits per second to 10 Mbits per second), as well as IP-TV with a broad choice of TV channels and services provided under the “STREAM” brand.

The soft-launch of HDTV was implemented simultaneously with the commencement of MGTS’ “last mile” modernization project, which will enable the technical infrastructure for HDTV services. Within the framework of the 2-year modernization programme, MGTS network will add fibre-optic connections from automated telephone exchanges to the subscribers’ homes, as well as ADSL2+ equipment installed in the subscribers’ homes. The data transmission speed of the modernized parts of the network will increase from 6 Mbits per second to 24 Mbits per second. More than 80% of Comstar broadband services subscribers are expected to have the internet access with a speed of over 24 Mbits per second, as well as HDTV services by the end of 2009.

In order to view films and TV programmes in the HDTV format, a special ADSL2+ modem and an HDTV compliant decoder are required. ADSL2+ modems are already sold and rented by Comstar Direct. The current HDTV equipment also supports existing TV formats.

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.