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07
Jul

50 mln Cellular Subscribers? Not yet...

Subscriber additions totaled 2.6 mln in June bringing the number of cellular users to 49.5 mln. The country's penetration stands at 34% - twice as high compared to June 2003.

Penetration in Moscow increased to 79% mainly thanks to aggressive sales by MTS that enlisted about 270,000 new subscribers. MegaFon signed up 23,000 customers in Moscow while Vimpelcom for the first time in its history recorded negative (!) subscriber additions in Moscow region due to the numbering capacity constraints well predicted by the company's management.

MTS also posted impressive growth in St.Petersburg getting the largest stake of net adds while Vimpelcom signed the largest number of customers in the regions outside Moscow and St.Pete.

Russian Mobile Subscribers

Mobile Subscribers June 30, 2004 May 31, 2004
Russia 49,470,000 46,890,000
  Penetration 34.1% 32.3%
Moscow 13,397,720 13,138,560
  Penetration 78.9% 77.4%
St.Petersburg 4,425,304 4,243,854
  Penetration 69.8% 66.9%
Russian Cellular
Market Breakdown, June 2004
Russian Net Additions,
June 2004

In June Vimpelcom entered Far Eastern market, the only Russian macro-region where it had no operations, after closing the long-anticipated acquisition of Dal Telecom International. We included DTI's subscribers (322,000 as of June 30, 2004) in Vimpelcom's numbers presented below. DTI acqusition combined with greenfield rollout made Vimpelcom the leader in terms of regional expansion - it has networks in 66 regions as of 7 June 2004 (MTS has 65 and MegaFon has 63).

The position of DTI in our Top 10 is now taken by Skylink - a new holding company with ambitious plans to build pan-Russian CDMA-2000 network in 450 MHz band. So far we have included Moscow (MCC) and St.Petersburg (Delta Telecom) NMT and CDMA operations in Skylink results but plan to expand the list as the holding consolidates other companies under Skylink umbrella. At the moment only MCC and Delta operate under Skylink brand; Uralwestcom (Ekaterinburg) and SONET (Moscow) are to be merged into Skylink shortly.

MTS signed an agreement with Dalsvyaz (PSTN incumbent operator) to purchase 50% of Primtelefon, GSM license holder for the Far East area where MTS already owns 50% stake. With this move MTS decreased its Russian unconsolidated subscribers from 200,000 to only 11,000. Remaining unconsolidated companies are Volgograd Mobile and Astrakhan Mobile. MTS holds 50% in both operators.

Top 10 Mobile Operators

# Company June 30, 2004 May 31, 2004
1 MTS 23,534,000 22,180,400
Moscow
6,120,000 5,850,000
Ukraine (UMC)
4,634,000 4,360,000
Belarus
744,700 688,800
2 Vimpelcom 16,300,000 15,053,000
Moscow
6,183,000 6,185,000
3 MegaFon 9,046,320 8,592,155
Moscow
1,035,405 1,012,560
Tajikistan
24,180 23,100
4 Uralsvyazinform 1,492,600 1,457,600
5 SMARTS Group 1,410,000 1,346,000
6 Sibirtelecom 677,800 662,800
7 N.Novgorod Cellular 451,834 445,636
8 Ekaterinburg Cellular Communications 294,231 285,052
9 Skylink 183,550 180,700
10 New Telephone Company 160,886 160,915

Moscow and St.Petersburg

Moscow License Area

Moscow Market Breakdown
June 30, 2004
Net Additions in Moscow,
June 2004

St.Petersburg and Leningrad Region

St. Petersburg Market Breakdown
June 30, 2004
Net Additions in St.Petersburg
June 2004