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03
Sep

Vimpelcom Leads in Moscow, MTS Expands in Russia

Russian mobile networks enlisted 1.6 mln new subscribers in August, which represents a slight decline from July numbers (1.75 mln) reflecting traditionally weak sales in the last summer month.

Top 10 Cellular Operators

Company August 31, 2003 July 31, 2003
Total Moscow Total Moscow
MTS* 13,280,000 4,390,000 12,270,000 4,290,000
Vimpelcom 8,530,000 4,835,000 7,960,000 4,650,000
MegaFon** 4,942,745 593,643 4,653,450 513,257
SMARTS Group 915,000   860,000  
Uralsvyazinform 869,800   789,329  
Siberia Telecom 352,744   324,443  
N.Novgorod Cellular 279,087   268,142  
Tomsk Cellular Communications 183,904   169,926  
Ekaterinburg Cellular Communications 161,490   155,600  
Tatincom 118,606   120,239  

* including UMC of Ukraine (2.4 mln) and MTS Belarus subscribers (250,000)
** including 8,500 in TT-Mobile (Tajikistan)

MTS finally completed SibChallenge deal (135,000 subscribers) and also acquired Primtelefon (91,000 subs) - a strategic asset for MTS providing access to Far Eastern territories. We have included both companies into MTS subscriber base displayed in the table above. With these transactions closed, only a few attractive independent cellular operators left in the country.

Russian Mobile Subscribers

Mobile Subscribers Aug. 31, 2003 July 1, 2003
Russia 28,480,000 26,880,000
  Penetration 19.6% 18.5%
Moscow 9,870,000 9,505,000
  Penetration 58.1% 55.9%
St.Petersburg 2,971,000 2,841,000
  Penetration 47.2% 45.1%

Russian Cellular Market Breakdown

Moscow Market

Megafon demonstrated strong growth in subscriptions for the second month in a row thanks to the new (and heavily promoted) O'Lite pre-paid tariff plan. Vimpelcom was again a winner in Moscow while MTS slowed down the pace. Nevertheless, we believe that MTS will be able to restore its share in net additions soon.

Moscow Net Additions, August 2003