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03
Nov

MTS Wins Net Additions in Moscow while Vimpelcom Takes Regions

For the past several years October and November cellular sales in Russia were slow with following significant rebound in December. October 2004 wasn't an exception. Net sales decreased 20% to 2.7 mln compared to September results. The present trend, whereas the net sales are expected to remain flat in November and almost double in December, will bring the total number of Russian cellular users to 70 mln by the end of 2004.

We estimate the cellular services penetration in Russia at 42.5% as of October 31, 2004 - 20.6% increase y-o-y and 17.6% since the beginning of 2004.

Russian Mobile Subscribers

Mobile Subscribers October 31, 2004 September 30, 2004
Total Russia 61,770,000 59,040,000
  Penetration 42.5% 40.7%
Moscow 15,105,908 14,852,613
  Penetration 88.9% 87.4%
St.Petersburg 5,170,722 5,028,259
  Penetration 81.6% 79.3%
Subscribers outside Moscow and St.Pete 41,493,370 39,159,128
  Penetration 34.1% 32.1%
Russian Cellular
Market Breakdown, October 2004
Russian Net Additions,
October 2004

Top 10 Mobile Operators

# Company October 31, 2004 September 30, 2004
1 MTS 28,835,000 27,600,000
Moscow
6,830,000 6,700,000
Ukraine (UMC)
5,894,000 5,530,000
Belarus
1,041,000 970,000
Uzbekistan
264,000 260,000
2 Vimpelcom 21,580,000 20,550,000
Moscow
6,695,000 6,645,000
Kazakhstan
702,000 676,500
3 MegaFon 12,155,280 11,487,353
Moscow
1,514,166 1,448,832
Tajikistan
34,700 28,000
4 Uralsvyazinform 1,867,200 1,778,000
5 SMARTS Group 1,647,000 1,600,400
6 Sibirtelecom 782,700 759,800
7 N.Novgorod Cellular 554,388 523,300
8 Ekaterinburg Cellular Communications 336,185 326,713
9 New Telephone Company 224,450 211,605
10 Skylink 186,600 182,000

Moscow and St.Petersburg

Moscow License Area

The number of cellular customers in Moscow passed 15 million milestone! MTS was the leader in the net sales race in the capital attracting more than 50% of net additions. MegaFon was runner-up, while Vimpelcom showed modest results, mainly due to the company's strict churn policy (4 months) aimed to "clean up" inactive subscribers. Cellular penetration in Moscow will break 90% already in November.

Moscow Market Breakdown
October 31, 2004

Net Additions in Moscow,
October 2004

St.Petersburg and Leningrad Region

MegaFon signed the largest number of subscribers in St.Petersburg among competition, while for the 3rd month in a row Vimpelcom was the leader in overall net additions

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