Telenor, VimpelCom to set expansion strategy in 2007

Competition

VimpelCom, Russia's second-largest mobile-phone operator, and its shareholder Telenor will identify an international development strategy next year to sustain growth beyond Russia's saturated market.

„It will be interesting if we have a whole picture, a good business case,” OAO VimpelCom Vice President Nikolai Pryanishnikov told reporters yesterday in Moscow, where the company is based. VimpelCom and its main rivals OAO Mobile TeleSystems and OAO MegaFon want to expand beyond Russia, a country with 143 million inhabitants and 148 million subscribers. VimpelCom and Norway's Telenor ASA, which owns 26.6% of the Russian company, are in a legal dispute over expansion in Ukraine.
Pryanishnikov said it's too early to say which regions beyond Russia and other former Soviet countries VimpelCom will focus on in the future. Moscow Arbitration Court yesterday will hear a third suit by Telenor disputing VimpelCom's acquisition of Ukrainian Radio Systems, the country's fourth-largest wireless operator. Telenor controls Ukraine's largest mobile phone company ZAT Kyivstar GSM.

„Those things are not related at all,” Kjell Morten Johnsen, Telenor's head in Russia, said in a telephone interview yesterday. „Even though we are contesting a past decision, we welcome very much the management's initiative for a strategy going forward.” VimpelCom, which is also active in Kazakhstan, Tajikistan, Uzbekistan and Georgia, and recently bought control of Armenia's national phone company, Armentel, is also studying Azerbaijan, Belarus, Moldova and Kyrgyzstan, Pryanishnikov said.

He said it's unlikely VimpelCom will conclude any more acquisitions by the end of this year. VimpelCom is now in talks to acquire a 10% stake in Armentel which belongs to the Armenian government, Pryanishnikov said. The government agreed earlier this month for VimpelCom to by 90% of Armentel for €341.9 million ($438 million) from Greece's Hellenic Telecommunications Organization SA. Pryanishnikov said yesterday VimpelCom may want to develop Armentel's fixed-line business as its first experience in the sphere but has not yet made a final decision. „For us this is a new opportunity,” he said. (Bloomberg)

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