Moscow, Russia – November 17, 2008 – “COMSTAR – United TeleSystems” JSC (“Comstar” or “the Group”) (LSE: CMST), the largest integrated telecommunications provider in Moscow and 67 Russian cities, today announced that all of the share options allocated under its 2006-2008 incentivisation programme have been exercised.

In 2006, Comstar’s 10 top managers and members of the Board of Directors were granted options under the 2006-2008 incentivisation programme. The programme was discontinued in April 2008 due to the launch of a new long-term incentive programme. The options, which were allocated in November 2006 and exercised on November 12 and November 13, 2008 (excluding Stock Bonus options that were exercised in 2006), comprise rights to acquire a total of 2,403,159 Global Depositary Receipts or 0.575% of Comstar’s share capital. The options have been exercised at the stipulated strike price of US$ 4.60 per GDR.

According to the decision of the Comstar Board of Directors on March 31, 2008, the option holders are entitled to sell the GDRs acquired under the option programme back to Comstar for US$ 5.34 per GDR, which is the weighted average closing price of the Comstar GDR on the London Stock Exchange for the 60 day period up to and including October 15, 2008.

Comstar used the 1,970,004 GDRs repurchased in 2006, in order to facilitate theexecution of the options allocated in November 2006. The cash paid by Comstar for the repurchase of the shares from the programme participants amounted to US$ 1.8 million.