COMSTAR-UTS HAS ACQUIRED 75% AND ONE SHARE OF CALLNET, AN ARMENIAN TELECOMMUNICATION COMPANY

Analytical Information Agency, Russia
Oct 30 2006

Comstar-UTS OJSC has acquired 75% and one share of Callnet, an Armenian
telecommunication company, with a possible exercise of an option to
buy out the remaining share, Comstar says.

"This is the first deal of the planned and declared in October 2006
acquisitions that will enable us to use the funds raised during the
IPO to realize our investment program in regions," Comstar’s General
Director Erik Franke said.

Callnet is one of the four Armenian operators holding a traffic
transit license. Its 100% subsidiary – Cornet – is the only Wi-Max
supplier in Armenia.

In 2005, Callnet’s proceeds doubled y-o-y to $4.3 mln.

Comstar-UTS holds fixed-line telephony assets of Sistema JSFC. They
are 53.04% shares of MGTS, 100% shares of MTU-Inform CJSC , 100%
shares of Telmos CJSC, 100% shares of MTU-Intel CJSC (including its
100% subsidiary Golden Line).

In 2005, Comstar’s net income under US GAAP grew by 39.% to $106 mln.

Proceeds rose by 30.6% to $907.6 mln.

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