Vimpelcom annual report shows growth below expected levels

13 Mar 2008

Vimpelcom, Russia’s second-largest mobile phone operator by subscribers, reported a 47.3% increase in revenue to USD7.162 billion for 2007, leading to a net profit of USD1.463 billion for the year. This equates to an 80.2% increase in net income year on year. While OIBDA amounted to USD3.6 billion, OIBDA margin fell slightly to 50.2% from 50.4% full year 2006. The revenue gains were attributed to growth in ARPU and an increase in the number of active subscribers. The company had 51.7 million customers at the end of 2007, up 13.6% from a year earlier. However, although Vimpelcom added nearly 420,000 subscribers in Russia in the fourth quarter of 2007 its market share based on subscriber numbers fell to 29.9%.

Vimpelcom’s chief executive officer Alexander Izosimov said the company planned to invest USD2.7 billion this year in broadband internet projects and the rollout of a 3G network, he said, ‘our aspiration [is] to expand into adjacent businesses and new geographic areas,’ claiming ‘we’re transforming Vimpelcom from a purely mobile into an integrated telecom operator’.

Vimpelcom’s interests include cellular operations in Russia, Kazakhstan, Ukraine, Tajikistan, Uzbekistan, Georgia and Armenia. The results did not include Golden Telecom, a Russian fixed line and broadband company it acquired for USD4.3 billion at the end of February 2008.

Russia, Beeline (Russia), VEON