Comstar Buys Astelit

MOSCOW -- "COMSTAR - United TeleSystems" OJSC ("Comstar UTS") (LSE:CMST) today announced the acquisition of a 100% stake in Astelit. Astelit is an alternative wireless fixed-line telecommunications company providing services to customers in the Moscow, Saint-Petersburg, Nijny Novgorod and Lipetsk.

Founded in 1992 by Telecom Italia, Astelit provides integrated fixed-line services. The operator has over 200 km of its own fiber optic infrastructure, which covers the central parts of the cities in which it operates. 97% of its clients are large corporate customers and include embassies and representative offices of multinational companies that have operated in Russia over a number of years. Astelit has a large package of licenses, which enables the operator to provide its services across 51 Russian regions.

Astelit's 2005 US GAAP revenues amounted to US$ 4.4 million. The Company reported US$ 1.4 million of EBITDA and an EBITDA margin of 32%.

Semyon Rabovsky, Chief Executive Officer of Comstar UTS, commented: "The acquisition of this asset gives us a stable and valuable additional client base in the key cities of Moscow and Saint-Petersburg. Astelit has a high level of liquidity and financial stability for a medium sized operator, and also owns a large portfolio of licenses and points of presence in the regions. The further development of Astelit will be in line with the next generation network (NGN) project and include the diversification of the range of services provided to its existing clients".

Comstar United Telesystems JSC (London: CMST)