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13
Sep

Mobile Sales Soar in August

Despite the traditional August slowdown in mobile sales observed in previous years, the last summer month of 2004 brought as many as 3.1 mln new subscribers, outperforming record July 2004 sales. The subscriber net additions were also 1.5 mln (!) higher than a year ago. Penetraton in the country is growing steadily. According to our estimates it has reached 38.3% as of August 31, 2004 (36.2% in July 2004 and 19.6% in August 2003).

Russian Mobile Subscribers

Mobile Subscribers August 31, 2004 July 31, 2004
Total Russia 55,630,000 52,520,000
  Penetration 38.3% 36.2%
Moscow 14,333,793 13,759,384
  Penetration 84.4% 81.0%
St.Petersburg 4,830,395 4,684,195
  Penetration 76.2% 73.9%
Subscribers outside Moscow and St.Pete 36,465,812 34,076,421
  Penetration 29.9% 28.0%

Vimpelcom revs up sales both in Moscow and in the regions encouraged by the resolution of the numbering capacity problem. MTS keeps leading positions in the Moscow License Area. Impressive net adds in Moscow demonstrated by MegaFon should be attributed to introduction of a new tariff whereby customers are being charged for connection only rather than actual air-time used.

Russian Cellular
Market Breakdown, August 2004
Russian Net Additions,
August 2004
Top 10 Mobile Operators
# Company August 31, 2004 July 31, 2004
1 MTS 26,440,000 24,937,500
Moscow
6,535,000 6,350,000
Ukraine (UMC)
5,267,000 4,960,000
Belarus
895,150 817,500
Uzbekistan
244,200 230,000
2 Vimpelcom 18,470,000 17,300,000
Moscow
6,430,000 6,204,000
3 MegaFon 10,508,263 9,758,995
Moscow
1,312,901 1,145,484
Tajikistan
26,593 25,300
4 Uralsvyazinform 1,709,000 1,617,500
5 SMARTS Group 1,555,000 1,491,000
6 Sibirtelecom 735,100 710,175
7 N.Novgorod Cellular 503,720 453,000
8 Ekaterinburg Cellular Communications 315,840 304,906
9 New Telephone Company 180,920 203,543
10 Skylink 180,100 178,100

Moscow and St.Petersburg

Moscow License Area

Moscow Market Breakdown
August 31, 2004
Net Additions in Moscow,
August 2004

St.Petersburg and Leningrad Region

So far Vimpelcom failed to fully capitalise on additional numbering capacity in St.Petersburg. The operator increased the churn in order to free numbers for new customers, while MTS and MegaFon performed quite well in the city, signing 45 thsd and 70 thsd net additional subscribers respectively.

St. Petersburg Market Breakdown
August 31, 2004
Net Additions in St.Petersburg
August 2004

Beyond Russia

Steady cellular growth is observed in the rest of CIS markets where cellular boom either just started or is to start within the next 6 to 12 months.

Vimpelcom has won the tender for the 2nd largest Kazakhstan operator KaR-Tel . The acquisition deal is to be closed shortly and probably already in September we will add KaR-Tel subscribers to Vimpelcom statistics. That will bring 600+ thsd users under Vimpelcom umbrella.

MTS is about to outnumber its major competitor Velcom in Belarus. MTS has been leading in net additions since April 2003 and finished August with 48% market share. The difference between the two market leaders is just 5,000 subscribers (Velcom had 900 thsd subscribers at the end of August according to Mforum.ru). The remaining 4% of the market is being held by BelCel - NMT/CDMA-450 operator in Belarus. The announcement of the tender results for the 3rd GSM national license may also give a new momentum to the cellular market development in the Republic.