Vodafone has been considered a potential purchaser of MTS for the last five years. (In the photo: MTS president Mikhail Shamolin, left, with Vodafone president Vittorio Colao)
Photo: Ôîòî ïðåäîñòàâëåíî ÌÒÑ
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Vodafone Eyes Moscow
The British cellular provider Vodafone, the world’s largest such company by receipts, has announced that it is opening an office in Moscow. To operator on the local market, which is divided between the “big three” Russian companies, it will have to form a partnership with one of them. It has already reached an agreement with MTS on joint equipment purchases, content sharing and special offers for common clients but, according to Vodafone president Vittorio Colao said that combining businesses was not under discussion.
MTS is hoping to increase its corporate segment by servicing Vodafone customers within the MTS market area, and Vodafone will take advantage of MTS marketing expertise on the Russian market. Vodafone is active now in Europe, the Middle East and Southeast Asia. In June, Vodafone had 270 million clients. MTS has 91.7 million, according to ACM Consulting. Vodafone receipts in the quarter ending June 30 rose 7.5 percent over the same period of the previous fiscal last year to £8.25 billion. Its capitalization on the LSE yesterday evening was $101.8 billion.
Vodafone had repeatedly expressed interest in the Russian market. MTS stock rose 15 percent in January 2004 due to a rumor that it was being acquired by the British powerhouse. Yesterday, after the announcement of the partnership deal, MTS ADR rose 19 percent to $37.30 on the NYSE. Analysts say Vodafone may use MTS long distance connections to lower the cost of calls to Russia. MTS president Mikhail Shamolin said that MTS will “invite” Vodafone retailing specialists to Russia.
The Russian company’s position has been endangered lately by the active development of its competitor. VimpelCom has purchased 49.9 percent of Evroset. MTS has 1500 retail outlets, which will become the exclusive distributors in Russia of the new model Blackberry Storm with interactive screen. Vodafone and Verizon Wireless (the Vodafone brand in the United States) have exclusive rights to its sales.
www.kommersant.com
All the Article in Russian as of Oct. 31, 2008
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