Vimpelcom gets go ahead for St Petersburg network

10 Mar 2003

Russia’s second largest cellular operator Vimpelcom has announced it has received permission to roll out a GSM-900 network in northwestern Russia from the state regulator the State Committee of the Russian Federation on Communications and Information. Vimpelcom is the last major Russian mobile operator to receive a concession to offer services to St Petersburg and its rural environs – potentially one of the biggest and most lucrative areas of the country. The cellco, which operates under the BeeLine brand name, had five million users at the end of 2002 having added three million subscribers in just twelve months, but is keen to stay on the heels of leading mobile player Mobile TeleSystems (MTS). The company conducted feasibility studies in and around St Petersburg in anticipation of the licence award, although at the time the spectrum in question was being used by civil and military bodies The Communications Ministry was expected to have made a decision on the award in September 2002, but delays in freeing the requisite spectrum subsequently pushed the award back, leading Vimpelcom to at one point threaten to forge ahead without official sanction.

Vimpelcom will face additional competition from MegaFon, a new entity formed in August 2001 through the merger of Sonera’s (now TeliaSonera’s) Russian mobile assets (including the market’s third largest player North-West GSM and Moscow-based Sonic Duo) with those of Telia and Telecominvest. Vimpelcom has, however, already been buoyed by the announcement that it has won a contract to provide cellular services to the 450 members of parliament’s lower chamber, the Duma. Its strong position in Moscow is reflected in its 52% market share: on a national basis it has a 28% share.