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Mobile TeleSystems to invest $700 mln in Ukraine this year

OAO Mobile TeleSystems will invest as much as $700 mln in its Ukrainian unit this year to develop new services and improve network coverage.

„We are one of the leaders in the Ukrainian market,” Mobile TeleSystems CEO Leonid Melamed said yesterday at a press conference in Kiev. „We want to strengthen and hold our share market here.” Mobile TeleSystems, which is based in Moscow, wants to expand in Ukraine because the economy is growing at a faster pace than most other eastern European countries.
Its Ukrainian Mobile Communications unit competes with ZAT Kyivstar GSM, the country's largest mobile-phone company, LCC Astelit and Russia's OAO VimpelCom. The unit has 40.8% of the market and Kyivstar has 43.9%. Astelit and VimpelCom control the rest. Ukraine's $105 billion economy expanded 7% last year and is expected to grow 6.5% this year, according to government forecasts.

Ukrainian retail sales advanced 25% in 2006 as higher wages spurred consumption. Mobile TeleSystems will launch so-called code division multiply access services, which allow faster mobile access, in Ukraine at the end of the Q1 or the beginning of the Q2, Melamed said.
The company will also offer fixed-line and mobile services for corporate clients, increase the number of shops throughout the country and introduce new programs for clients, he said. „We hope our strategy will allow us to increase our revenue by 15% at least this year in Ukraine,” Melamed said.

Mobile TeleSystems will concentrate on the former Soviet Union states rather than make acquisitions elsewhere, Melamed said. „If you invest $7 billion to $8 billion in the next several years in this region, your revenue will total at $12-15 billion,” Melamed said.
Still, „the company is interested in other markets.” Mobile TeleSystems will re-brand Ukrainian Mobile Communications to MTS this year. It will also appoint Pavel Pavlovskiy as its Ukrainian CEO. Pavlovkiy will replace Adam Wojacki who leaves on March 31. (Bloomberg)