Corporate presentation

CorporatepresentationMay 2007

Corporate presentation May 2007

2

DisclaimerMatters discussed in this presentation may constitute forward-looking statements. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events revenues or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “predict”, “could”, plan”, “project,” “will,” “may,” “should” and similar expressions identify forward-looking statements. Forward-looking statements include statements regarding: strategies, outlook and growth prospects; future plans and potential for future growth; liquidity, capital resources and capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, growth in demand for our products; economic outlook and industry trends; developments of our markets; legal trends and the impact of regulatory initiatives; and the strength of our competitors.The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control and we may not achieve or accomplish these expectations, beliefs or projections. In addition, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the achievement of the anticipated levels of revenues, profitability and growth, cost and synergy of our recent acquisitions and restructuring, the timely development and acceptance of new products, the impact of competition and competitive pricing, the ability to obtain necessary regulatory approvals and the ability to fund our future operations and capital needs through borrowing or otherwise, the ability to successfully implement any of our business strategies, the ability to integrate our business and to realize anticipated cost savings and operational benefits from such integration, our expectations about growth in demand for our products and services, the effects of inflation, interest rate and exchange rate fluctuations, and our success in identifying other risk to our business and managing the risk of the aforementioned factors, the condition of the economy and political stability in Russia and the other markets of operations and the impact of general business and global economic conditions.Neither we, nor any of our respective agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation.The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.


3

Comstar at a Glance The leading combined telecommunications company in Russia and CIS (incumbent in Moscow

and leading alternative operator with presence outside Moscow)

Completed vertical integration of all divisions and successful rebranding in 2006

Comstar provides fixed line telephony, broadband internet and multi-service telecom solutions to residential and corporate clients in Moscow, regions and internationally through its five business units:

MGTS

Comstar-Direct

Comstar-Moscow

Comstar-Regions

Comstar-International

Alternative segment

Traditional segment~ 3.6 million residential and ~ 73.000 corporate subs

~ 500,000 residential internet subs

~ 34,000 corporate subs

Presence in 5 regions, licenses, WiMax frequences

Presence in Ukraine and Armenia, WiMax licenses, synergies


4

Proven Track Record Of Delivering ResultsRevenues (US$ in mln)Revenues (US$ in mln) OIBDA (US$ in mln)OIBDA (US$ in mln)

123 147.0 167.0

267.0

355.070

9085

95

77

-3-3-2-1-3

-50

0

50

100

150

200

250

300

350

400

450

500

2002 2003 2004 2005 2006

US

$ m

ln.

274.7 341.3 413.5538.3

695.0164

247.9281.7

369.3

425.2

0

200

400

600

800

1000

1200

2002 2003 2004 2005 2006

US

$ m

ln.

•Underlying OIBDA up 19% year on year to US$ 428.6 million with underlying OIBDA margin of 38.3%

•In Traditional 44.3%•In Alternative segment 18.1%

•Restructuring charge US$ 3 million•CPP added US$29 million in costs•Provision for Rostelecom traffic US$ 6 million

•Revenues up 23% year on year to US$ 1.12 billion •In Traditional segment up 29%•In Alternative segment up15%

•CPP added US$36 million in subscriber revenue •Companies, acquired in 2006 added US$ 11.4 million

438.7

589.2

695.2

907.6

1,120.2

190.0

236.0250.0

358.8

428.6

Traditional segment Alternative segment Intercompany eliminations

CAGR = 26%

CAGR = 23%


5

2006- Breakthrough Year • Successful IPO on LSE raising $1 billion for 33% of shares

• Successful rebranding of all the companies of the Group

• New international management team in place

• Regulatory changes successfully adopted

• Increase in ownership in MGTS by 9% to 56%, $181.4 million spent

• Successful restructuring of the business: operating units separated from corporate center

• Optimization of Alternative segment: headcount reduced by 277, rented office space reduced by 3,400

square meters, management layers reduced from 8 to 4, 3 billing systems being integrated, ERP

system being launched

• Creation of Corporate Center

• Share option programme for Directors and top-management launched

• New KPI-based motivation system for the employees introduced

• International expansion launched with 4 acquisitions in Ukraine and Armenia

• Election of two independent directors, Dietmar Kuhnt and Yngve Redling

• 4 BoD committees established: strategy, audit, corporate governance and remuneration

• First combined sales and service office opened for Comstar – Direct and MGTS

• Acquisition of 25% + 1 share in Svyazinvest for $1.4 billion including call and put option

Arrangement and utilization of US$ 675 million loan facility


6

Combined Telecom Operator

Operations are divided into five business lines with clear P&L responsibilities

COMSTAR-UTSCOMSTAR-UTSCORPORATE CENTRECORPORATE CENTRE

100%

(Comstar-Moscow)

CLEC

Multi-service solutions

to corporate clients/elite housing

52% (48% owned by SMM)

(Comstar - Direct)

CLEC

Broadband Internet

IPTV (double play) Other VAS Dial-upto residentials an

corporates

(Comstar-Regions)

CLECs



67% voting56% economic

(MGTS)

ILEC

Regulated voice VASto residentials and

corporates Wholesale access Interconnectto other operators

Svyazinvest

Moscow region Regions

25% +1

(Comstar-International)

International

CLECs




7

11,000

16,18917,45519,361

41%

100%

22%31%

0

10,000

20,000

30,000

31/12/04 31/12/05 31/12/06 31/12/11

0%

50%

100%

employees % digitalized

MGTS: Fixed Line Incumbent in MoscowTotal MGTS Revenue (US$ million)Total MGTS Revenue (US$ million)11

385.7

480.8

639.7

801

100

200

300

400

500

600

700

800

2003 2004 2005 2006

CAGR = 28%

MGTS and Comstar-Moscow are using the combined

backbone (11,000 thousand km of fiber)

“Last mile”: 98% share of residential installed access lines in

Moscow; 100,000 km of copper; 41% of lines digital (94% by

2010); direct upgrade to NGN. No local loop unbundling in the

mid-term

NGN network – infrastructure investments to increase non-

regulated services: single backbone for MGTS and Comstar

Use of MGTS real estate: US$ 7.6 million gain from sale of 1

switching center in 2Q’06. Further sales- early 2009. Total

114 switches to be renovated and partially freed up through

2012

Employee reduction program: approx. 1,400 to 16,189;

number of lines per employee expected to increase by 45%

from 268 by 2010

Client orientation: single customer care number; first

combined sales center with Comstar Direct (six more to open

in 2007)

1 Including intercompany

Number of EmployeesNumber of Employees


8

MoU based

April 2007

Time-based tariff plan 50% 25%

Combined tariff plan 30% 22%

Time-unlimited tariff plan 20% 53%

MGTS: Fixed Line Incumbent in Moscow (2) Market deregulation: first step - introduction of per minute billing-

from Feb.1, 2007; followed by active marketing initiatives:

Time-based tariff=125 RuR+ 0.28 RuR per minute ($4.7+$0.01 per minute)

Combined tariff= 229 RuR for 370 min +0.23 RuR per minute when the limit is exceeded ($8.7+$0.009)

Unlimited tariff= 380 RuR ($14.4)

New tariff structure and additional revenue sources: tariff rebalancing; CPP added US$ 32.9 million in ’06; Budget reimbursements – received US$ 25.8 million in 2006, another US$ 36 million to be received in 2007

New services (SMS from fixed line)

Growth in Regulated Tariffs (in USD)Growth in Regulated Tariffs (in USD)11

0

1

2

3

4

5

6

7

8

1999 2000 2001 2001 2002 2002 2003 2003 2004 2005 2006

US$7.6

1Before the introduction of per minute tariffs


9

“One-stop-shop”

Successful rebranding of all operating companies

“One-stop-shop” concept in servicing residential customers

1st combined and service office opened in December 2006, six more to open in 2007

Cross-sales and synergies


10

108.4

131.5147.9

163.9

-10

20

50

80

110

140

170

200

2003 2004 2005 2006

Comstar-Moscow - Leading Alternative Provider

Corporate Revenues of Alt. segment (US$ million)Corporate Revenues of Alt. segment (US$ million)

CAGR = 15%

1 Source: Direct Info (by revenue), Comstar market share includes MGTS (10.3%) and Comstar-Moscow (8.2%) corporate clients

Corporate Market in Moscow (2006) Corporate Market in Moscow (2006) 11

Total: US$ 2.16 bn

19% share on the Moscow corporate market

Restructuring and CLECs integration in 2006 resulted in substantial

savings: reduction of labour force by 20% in November – December

2006, office space reduced by 3400 square meters, expected savings

of US$ 8 mln from 2007. Further cost efficiency targets:

optimisation of existing network and cost structure (office rent,

centralized purchasing)

Single NGN network with MGTS; targeted Capex spending

Key drivers: business centers and hi-end real estate developments

show good growth potential

Introduced new services: IP-VPN, “Hybrid” VPN, WiFi telephony and

Logic Line, aimed at better ARPUs

Comstar and MTT signed an agreement to provide wireless access

through Comstar’s Wi-Fi network to MTT’s roaming partners via

WLAN roaming to Russian and foreign mobile operators and Wi-Fi

providers, with effect from the third quarter of 2007.

Cooperation with MGTS to provide wireless Wi-Fi connection through

coin-box telephones network in Moscow (approx. 200 by the end of

2007)

Golden Telecom

19%

Others43%

Equant3%

Comstar19%

Rostelecom11%Synterra

5%


11

493.2

343.7

110

4.4

102.5

249.5

360400

182.4

836.60

100

200

300

400

500

600

2003 2004 2005 2006 April 2007

Comstar-DirectInternetInternet Residential Subscribers (‘000) Residential Subscribers (‘000) 11

Broadband Penetration Broadband Penetration 22

Comstar-Direct controls 38% market share of broadband in Moscow where broadband penetration is at 26%

44% growth in broadband customers YoY; 38% market share in Moscow 3; double play – 18% of PayTV market in Moscow

Added subscriber # 400,000 on April 16, 2007

ARPL : US$ 20.2, + 7% YoY growth

New services introduced – competitive on price and speed

Launch of IPTV

VOD and gaming add-ons for broadband customers

US$ 8/month and free ADSL modem offer for dial-up customers

Leveraging Comstar group synergies:

First of seven combined sales office

Segmentation of MGTS customer base - over 90% of lines are ADSL compatible, low levels of incremental capex

Direct mailing to MGTS subs

Joint call center with Comstar-Moscow

Proprietary call center capacity doubled

New reglament with MGTS to be introduced in June 2007- to reduce connection time

Targeted marketing campaigns

Broadband penetration in Russia is still relatively low compared to CEE

Growth drivers:

PC penetration

Internet penetration

Dial-up replacement1 Source: Company data2 Source: Direct info, 2006, by number of households3 Source: Direct Info, 2006, including home networks, using Stream, by number of subs

Double play (+TV)

ADSL

Dial-up

39.4%

25.6%

16.7% 16.7% 15.2%

0.8%3.5%

WEAverage

Moscow Hungary Poland CzechRepublic

Russia Ukraine


12

Other alternative operators, 20%

Comstar; 10%MGTS; 70%

Markets and customers overview

34%68%

Total: 6.2m Lines

Total: 0.99m Subs

360 thousand subs (ADSL Stream)19 thousand subs (home networks

using Stream)

4.3m active lines 0.6m active lines

Comstar-Direct, 38%

Comcor (AKADO), 10% (cable)Corbina, 12% (cable)

Centel, 8% (cable)

Home networks, 32%

Moscow Fixed-line Market: Active Lines (By number of lines, 2006)

Comstar; 32%

Equant; 8%

Central Telegraph; 13%

Synterra; 4%

Other; 19%

Golden Telecom, 24%

Moscow Residential Broadband Segment (By number of subscribers, 2006)

# 1 in residential broadband users, alternative corporate segment & by number of lines in Moscow

Source: Direct INFO* 38% including subs of home networks (2%) who connect up to Internet using Comstar UTS channels


13

Comstar-Direct- targeted marketing campaigns


14

Comstar-Direct- attractive tariffs*

Monthly subscription fee

Internet+TV“Unlimited” (98

channels)

Speed Kbit/sec (download/upl

oad)

Prepaid traffic, Мb*

Per Mb when

prepaid limit is

exceeded

Internet

Internet+TV“Basic” (54 channels)

Internet+TV“Extended” (91

channels)

Start 8$ — — 128/128 Unlimited no

Time 10$ 13$ 15$ 20$ 6144/768 1000 0,03$

Freedom 15$ 18$ 20$ 25$ 1024/512 Unlimited no

Move 20$ 23$ 25$ 35$ 2048/512 Unlimited no

Stream 25$ 28$ 30$ 40$ 3072/512 Unlimited no

Mainstream 32$ 35$ 37$ 47$ 4096/768 Unlimited no

Streamer 40$ 43$ 45$ 55$ 6144/768 Unlimited no

* As of May, 2007

vs. average 33 kb/s for dial-up


15

Comstar-Regions

St. Petersburg

Moscow

Sochi

Samara

Saratov

Tymen

Focus on top priority regions Currently present in St. Petersburg, Saratov, Tyumen,

Samara and Sochi Digitalization completed at Tymenneftegazsvyaz in 2006 Cooperation with regional ILECs in Svyazinvest holding- the

entire 2007 will be dedicated to building relationships with

Svyazinvest Development outside Moscow through:

Selected M&As WiMax roll out subject to attractive business case Cooperation with regional incumbents Use of MTS network infrastructure where

economically feasible Building license coverage: key licenses obtained including

for the use of wireless technologies and 5.15-5.35 GHz pre-

WiMax frequences, for IP voice data transmission, for data

transmission

37.5

49.8

0

10

20

30

40

50

60

2005 2006 * Includes revenues outside Russia

*

33%

Mln

. U

S$


16

Comstar-International

4 acquisitions of alternative operators in

Ukraine and Armenia – Callnet and

Cornet (Armenia) and DG

Tel/Technologic Systems (Ukraine) in

2006

Subscription to 51% shares in Hellas on

Line, third largest Greek fixed line and

broadband provider (subject to

Antimonopoly approval, not consolidated

yet)

UKRAINE

ARMENIA

GREECE

Focused on metropolitan areas

(Kiev and Odessa) Selective M&A to expand

geographical presence UMC/MTS broad cooperation WiMax licenses obtained

Leading CLEC is acquired in

2006 Unique WiMAX license for the

entire country

Subscription for 51% shares of

a leading ISP in 2006 Attractive market with

extremely low broadband

penetration Strong local partners


17

Svyazinvest – acquisition of 25% plus one share

Svyazinvest companies: Center Telecom North-West Telecom Uralsvyazinform VolgaTelecom SibirTelecom South Telecom Far East Telecom Rostelecom

+28% (23% voting) in MGTS

Acquisition of Svyazinvest stake is both a “strategic bet” and attractive investment with opportunities to realize additional synergies

Call ($6.97) and put option for 11% of Comstar’s shares given to the Seller

aimed at resolving cross shareholding between Comstar and MGTS

Source: Svyazinvest


18

Svyazinvest strategy

Financialinvestment

Operatingsynergies

Strategicinvestment

2 representatives on the BoD

Changes to the charter

Dividends

Key strategic decisions

Improved reporting

Increased efficiency

Broadband development in the regions

Negotiate access to the regional infrastructure

Privatization / restructuring

Acquisition of Svyazinvest stake is both a “strategic bet” and attractive investment with opportunities to realize additional synergies

Short Term Medium Term Long Term

Buy out Svyazinvest’stake

(23%) in MGTS


19

Value Oriented Strategy

● Simplified legal structure

● Four business lines

in P&L

Restructuring

Integration

Broadband

MGTSModernization

RegionalExpansion

Convergence

Svyazinvest

Completed integration of Moscow operations in 2006

Follow “one company approach”

Synergies within group operations

Customer segmentation

NGN network and digitalization

Realizing efficiency gains

Monetising real estate assets

Deploying ADSL

Rollout of extended offering (started with IPTV)

Using favourable regulatory environment

Selective CLEC M&A

Deploying wireless technology

Selective international expansion

2 seats on BoD Buy out of MGTS stake Participation in Svyazinvest privatisation

Developing unique market solutions

Utilizing synergies with MTS

Optimizing sales & service functions

Integrated telecom solutions for all market segments in Moscow and regions with growing share of non-regulated revenues; Increase in contribution from regional operations; leader in

offering of next generation services

1

2

3

45

6

7


20

Outlook for 2007

● Revenue growth in line with the growth in 2006► Regulated tariff growth► Growth in revenues from corporate data and internet► Growth in revenues from residential broadband internet

● Approximately US$36 million compensation from the budget in 2007● OIBDA margin improvement from underlying level of 38.3% before new acquisitions

► Restructuring and cost optimization programme► MGTS tariffs► Regulatory changes

● CapEx less than US$350 million


21

Investment Case

● Combined telecom operator with robust growth, solid profitability and cash flow generation outlook

● Unique ‘last mile’ used for bundled offerings● Strategic shareholder in Svyazinvest (25% + one share) with 2 seats on the BoD● Established and growing regional (5 regions) and international presence (Ukraine, Armenia

and prospectively Greece)● Improved transparency of operations: 5 P&L lines and new segmental reporting structure from

Q1 2007● Comstar enjoys synergies with sister companies MTT and MTS


22

Appendix


23

(US$ million) 2004 2005 2006

Revenues 695.1 907.6 1,120.2

YoY% Growth 18.0% 30.6% 23.4%

OIBDA (excl. Stock Bonus) 249.9 358.8 428.6

% Margin 35.9% 39.5% 38.3%

Operating Income (excl. Stock Bonus)

173.7 268.4 297.7

% Margin 25.0% 29.6% 26.6%

Net Income (excl. Stock Bonus and non-cash change in fair value of call and put option)

76.1 105.9 178.1

% Margin 11.0% 11.7% 15.9%

Capex 228.5 228.5 301.7

% of Revenues 32.9% 25.2% 26.9%

Profit and Loss Statement: Selected Items

23% revenue growth YoY

38.3% OIBDA margin in 2006

Stock bonus awards for US$ 62 million

Change in fair value of call and put option US$60 million


24

Revenue Breakdown(US$ million)

2005 2006 Growth

Traditional segment

Residential 243.6 333.5 37%

Corporate 186.2 222.9 20%

Operators 209.7 244.5 17%

Intersegment revenue (101.2) (105.9) 5%

Total 538.3 695.0 29%

Alternative segment

Residential 70.7 90.8 28%

Of which broadband 50.4 77.5 54%

Corporate 147.9 163.6 11%

Operators 107.3 108.0 1%

Russia Regions & CIS 37.5 49.8 33%

Other revenue 7.4 14.1 91%

Intersegment revenue (1.5) (1.1) 27%

Total 369.3 425.2 15%

Traditional segment: 29% revenue growth YoY

Alternative segment: 15% revenue growth YoY

Broadband: 54% revenue growth YoY

Regions: 33% revenue growth YoY

CPP added US$ 36.3 million to the Group’s revenue from subscribers


25

Cash Flow Statement: Selected Items CFs from Operations

of US$ 273.6 million

US$ 976 million raised during the IPO in February 2006 (net of respective costs)

(US$ million) 2004 2005 2006

Net cash provided by operations 225.1 267.3 273.6

Net cash used in investing activities (187.2) (251.4) (1,751.9)

Net cash provided by / (used in) financing activities

(19.5) (20.3) 1,550.9

Effects of foreign currency translation of cash and cash equivalents

2.0 (1.0) 2.0

Cash and cash equivalents at the beginning of the period

47.0 67.4 62.0

Cash and cash equivalents at the end of the period

67.4 62.0 136.6


26

Balance Sheet: Selected Items In December 2006 Comstar arranged US$ 675 mln 6 month loan facility with ABN AMRO Bank N.V. with interest rate at LIBOR plus 1.2%. Loan can be extended to 12 months

(US$ million) 2004 2005 2006

Assets 1,418.4 1,641.4 3,537.6

Current assets 335.6 405.2 446.3

Long-term assets 1,082.8 1,236.2 3,091.3

Liabilities 586.4 645.8 1,470.7

Current liabilities 223.2 274.4 1,140.9

Long-term liabilities 363.2 371.4 329.8

Minority interests 450.6 516.1 496.7

Shareholders’ equity 381.4 479.5 1,570.2


27

4Q KPIsDecember 31,

2006December 31,

2005Growth

4Q’06 vs. 4Q ‘05September 30,

2006Growth 4Q’06 vs.

3Q ’06

Traditional segment subscribes

Residential 3,571,639 3,537,128 1% 3,560,620 0%

Corporate 72,639 77,324 (6%) 74,636 (3%)

Operators 254 232 10% 215 18%

Total 3,644,532 3,614,684 1% 3,635,471 0%

Alternative segment subscribes

Residential, incl. 475,119 437,077 9% 443,443 7%

Broadband subscribers 359,8951 249,542 44% 313,189 15%

Dial-up subscribers 109,589 182,351 (40%) 124,683 (12%)

Corporate 33,671 31,159 8% 33,467 0%

Operators 356 380 (6%) 355 0%

Total 509,146 468,616 9% 477,265 7%

Regions segment subscribers

Residential 84,728 81,452 4% 83,915 1%

Corporate 9,814 6,853 43% 8,271 19%

Operators 47 45 4% 46 2%

Total 94,589 88,350 7% 92,232 3%

[1] Includes 3,605 subscribers who signed contracts but were not connected to the service as at December 31, 2006


28

6 000

9 000

12 000

15 000

18 000

0 1 2 3 4 5 6 7

Total Telecom Services Spending as % of GDP 2004A

GD

P/C

apit

a (P

urc

has

ing

Po

wer

Par

ity)

in U

S$,

200

5A

5,2%6,0%4,5% 4,3%

3,4%2,2%

Ukraine Russia Poland CzechRepublic

Hungary EUAverage

Real GDP Growth Forecasts (2005A-2011E CAGR)Real GDP Growth Forecasts (2005A-2011E CAGR)

GDP/Capita (Purchasing Power Parity) 2005AGDP/Capita (Purchasing Power Parity) 2005A

US$11.1US$6,8

US$12,9US$16,9US$18,3

US$25,8

EUAverage

CzechRepublic

Hungary Poland Russia Ukraine

(US

$ in

'00

0s

)

Source: EIU, January 2007

Source: Pyramid Research (November 2005)

Telecom Spending Growth OpportunityTelecom Spending Growth Opportunity

The Russian market provides high growth potential given expected real GDP growth and a relatively under-penetrated telecoms market

Legend:

Amount of telecom services spending in US$ in 2004A

Russia US$14.1bn

Poland US$8.7bn

Hungary US$4.1bn

Ukraine US$3.7bn

Czech Republic US$3.9bn

Source: EIU, January 2007

Solid Macroeconomic Fundamentals


29

Attractive Market Potential

Well positioned in favourable Market Conditions

74,6% 69,0%

43,7%35,0%

16,4%7,8%

21,1%

WEAverage

Moscow CzechRepublic

Hungary Poland Russia Ukraine

94,6%86,3%

78,3% 75,8%

57,6% 54,3%58,7%

Moscow WEAverage

Hungary Poland Ukraine Russia CzechRepublic

59,6%54,6% 51,3%

41,1% 40,6%

6,2%12,8%

CzechRepublic

WEAverage

Poland Hungary Moscow Russia Ukraine

39,4%

25,6%

16,7% 16,7% 15,2%

0,8%3,5%

WEAverage

Moscow Hungary Poland CzechRepublic

Russia Ukraine

Fixed Voice Penetration (2006)Fixed Voice Penetration (2006) PC Penetration (2006)PC Penetration (2006)

Broadband Penetration (2006)Broadband Penetration (2006)Internet Penetration (2006)Internet Penetration (2006)

Source: Company data, Pyramid Research, stats agencies, Direct INFONote: Penetration in all charts calculated as % of households


30

05-10 CAGR = 14.9%

1,1%2,1%

6,5%

2005 2006 2010E

Ample Opportunities In Broadband

5,4% 8,6%23,6%

2005 2006 2010E

Russia (ex-Moscow)Russia (ex-Moscow)

Internet Penetration

Broadband Penetration

Source: Company data, Direct INFO, Pyramid ResearchNote: CAGR represents growth in projected users. Penetration calculated as % of households

05-10 CAGR = 34.3%

05-10 CAGR = 42.6%

15,9% 25,6%56,2%

2005 2006 2010E

35,4% 40,6%71,0%

2005 2006 2010E

MoscowMoscow

Internet Penetration

Broadband Penetration

05-10 CAGR = 28.7%

Significant growth potential in the Residential Broadband and Pay-TV markets

Pay-TV PenetrationPay-TV Penetration

1,8% 1,9% 2,4%

2005 2006 2010E

8,3% 11,9%34,6%

2005 2006 2010E

05-10 CAGR = 33.0% 05-10 CAGR = 5.9%


31

360115

9880

337 990

Comstar-Direct

Corbina Akado(Comcor

TV)

Centel HomeNetworks

Total

Home Computers Home Computers Penetration Level Penetration Level

(2006)(2006)

Moscow Internet Market In 2006

not connected to

Internet 41.2%

Dial-up 36.9%

100% = 3,867 households

69%2,668

householdswith

a computer

Internet Penetration (2006)Internet Penetration (2006) Structure of Connections (2006)Structure of Connections (2006)

connected to Internet 58,8%

Broadband 63.1%

In 2006 almost 1.5m households in Moscow are connected to the Internet. More than a half of them use Broadband Internet

110108

362 580

Comstar-Direct

ROL(Golden

Telecom)

Other Total

18.9%18.6%

62.4%100%

36.4%¹

100%

31%

1,570 households connected to internet

Source: Direct INFO Note: All household data in 000’s¹ Number excludes subs of homenetworks who connect up to internet using Comstar-UTS channels (this would account for additional 2%)

34%

11.6%9.9%

8.1%


32

Regulatory Changes

Effective fromEffective from ChangeChange Applicable toApplicable to

January 1, 2006 Rules for Traffic Routing in the Public Telephone Network

Long-distance voice services

October 19, 2005 Tariffs for Interconnect and Traffic Exchange Operators with Substantial Positions in the Public Network (MGTS, Comstar-UTS)

July 1, 2006

July 1, 2006

January 1, 2007

January 1, 2007

‘Calling party pays’ (“CPP”) principle

Rules of rendering of data transmission services

The Russian system and the plan of numbering

The particularity of providing telecommunication services for State defense, Security and Legal order providing

Local calls from fixed to mobile networks

Data transmission services

Fixed and mobile telephone networks

Telecommunication operators providing telecommunication services for State defense, Security and Legal order providing

Recent and foreseeable changes have no adverse impact on fundamentals of Comstar’s business


33

Shareholder Structure

Optimization of ownership structure: Integration of Golden Line into Comstar Turn 100% owned subsidiaries into branches

51%

52%48%

Other

14%1

Free float incl. GDRs

35%

Regional branches & subsidiaries

1 MGTS owns 14% of Comstar, as of Dec.12,20062 Including 7.7% owned by MGTS Finance

56% econ.

23% econ.

25%+12

21% econ.


34

Contacts

For additional information please visit

www.comstar-uts.com

or contact Masha Eliseeva

Head of Investor Relations

Phone: +7 985 997 08 52

E-mail: [email protected]

Documents

Corporate presentation