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Mobile TeleSystems targets acquisitions in ex-Soviet countries

OAO Mobile TeleSystems, eastern Europe's largest mobile-phone company, said it is actively pursuing acquisitions in former Soviet countries to sustain growth beyond the saturated Russian market.

„We have to take up the challenge of globalization of the telecommunications market and remain competitive,” CEO Leonid Melamed told reporters today in Moscow where the company is based. „We are going to study the possibility of non-organic growth, primarily in the CIS.” OAO Mobile TeleSystems, which counts more than 51 million subscribers in Russia and about 25 million more in Ukraine, Uzbekistan, Turkmenistan and Belarus, is looking at new regions with low penetration and rising incomes.

The company expects the market for mobile telecommunications in Russia to expand 14% this year to $15.5 billion and said penetration will reach 116%. While Melamed declined to name particular targets, he said that Mobile TeleSystems is actively looking to either buy assets or start new operations in all countries of the Commonwealth of Independent States. He said the company will be ready to pay more for assets than its competitors if it finds good synergies with its current business.

„We are not ready to pay more in the markets far away from us where there is no synergy,” said Melamed. „Sooner or later, markets will behave in a way when it will be beneficial for us to buy and we will realize our potential.” Mobile TeleSystems is attentively looking at markets in south-east and central Asia and the Middle East, said Melamed. He said that Mobile TeleSystems is studying India but bidding for Hutchison Essar Ltd., India's fourth-biggest cell-phone operator, is not on his agenda. (Bloomberg)