Vimpelcom aims to double Ukraine market share

21 Sep 2007

Russian cellco Vimpelcom aims to double its share of the Ukrainian market, where it operates under the BeeLine brand, in two to three years, an unnamed company official has said. BeeLine, formerly Ukrainian Radio Systems (URS) until the Russian operator acquired it for USD321 million in November 2005, relaunching as BeeLine the following April, currently has approximately two million subscribers, equating to a market share of about 5%. He went on to mention how Vimpelcom’s entry into the Ukraine market has been a bone of contention between two of its shareholders, Altimo, the telecoms arm of Russian tycoon Mikhail Fridman’s Alfa Group which owns 44% of the cellco, and Norway’s Telenor, which owns 29.9%. Telenor also owns 56.5% of rival cellco Kyivstar, the most-subscribed network, with around 43% of the market. Altimo holds the remaining 43.5%. The official said Telenor was not happy with [VimpelCom’s] entrance into the saturated Ukrainian market because this triggered price erosion. ‘Telenor wants to keep Vimpelcom as a regional operator because its share in Kyivstar is bigger than that in Vimpelcom,’ he added. Telenor won an injunction in a US court in August 2006 forcing Alfa to either sell its Kyivstar stake or divest from competing Ukrainian mobile operators within 120 days. Alfa responded by saying the ruling would have no impact because it could not be enforced in Ukraine.