News

Vimpelcom Leads in Moscow, MTS Expands in Russia

September 3, 2003

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
Company	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.