OREANDA-NEWS. November 18, 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 nine months ended September 30, 2009.

THIRD QUARTER HIGHLIGHTS

Consolidated revenues up 15% year on year and stable quarter on quarter in ruble terms at USD 375.1 million[2]

Adjusted OIBDA[3] up 13% year on year and 4% quarter on quarter in ruble terms to USD 161.1 million with increased margin of 43.0% in ruble terms

Net income attributable to Comstar-UTS of USD 26.9 million

Cash and cash equivalents and short term investments up 46% quarter on quarter in ruble terms to USD 293.3 million

Cash flow from operations up 12% quarter on quarter in ruble terms to USD 117.8 million

Cash capital expenditure[4] of USD 18.0 million (4.8% of revenues)

Free cash flow[5] up 2.6 times year on year and 12% quarter on quarter in ruble terms to USD 99.8 million

Residential broadband ARPU in Moscow up 14% year on year to RUR 319

Total broadband subscriber base up 32% year on year and 3% quarter on quarter  to 1.2 million

DLD/ILD traffic passed through Comstar’s proprietary network increased by 59% quarter on quarter to 114.7 million minutes

NINE MONTHS HIGHLIGHTS

Consolidated revenues up 15% year on year in ruble terms to USD 1,073.1 million

Adjusted OIBDA up 14% year on year in ruble terms to USD 439.8 million with margin of 41.0% in ruble terms

Net income attributable to Comstar-UTS of USD 69.5 million

Cash flow from operations up 2% year on year in ruble terms to USD 319.2 million

Cash capital expenditure of USD 93.2 million (8.9% of revenues in ruble terms)

Free cash flow up 64% year on year in ruble terms to USD 226.0 million

 [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:

31.33 Russian Rubles (RUR) per USD1 in the third quarter of 2009; RUR 32.21 per USD 1 in the second quarter of 2009; RUR 24.25 per US\\\\$ 1 in the third quarter of 2008; RUR 32.48 per USD 1 in the first nine months of 2009; and RUR 24.05 per USD 1 in the first nine months of 2008

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

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

[5] Here and below, Free Cash Flow is calculated as operating cash flow net of cash capital expenditure.