VimpelCom Looks Outside Of Ex-USSR For Expansion

VimpelCom, Russia's second-biggest player after Mobile TeleSystems - started expansion in the former Soviet Union in 2004 and operates in Kazakhstan, Ukraine, Uzbekistan and Tajikistan.

However, according to Chief Executive Alexander Izosimov, further acquisition targets are few in number.

"The companies in the CIS are either not for sale or the owners want way much more money than we're prepared to pay," he said.

Responding to criticism of October's acquisition in the Ukraine, where the company has failed to significantly boost its subscriber tally, Izosimov said he was certain VimpelCom would manage to overtake Turkcell Iletisim Hizmetleri to become third-biggest player in this increasingly mature market.

"Turkcell isn't used to harsh competition, having been a monopoly," he said adding that since Vodafone PLC's purchase of Telsim Mobil Telekomunikasyon, Turkcell will have to worry more about home market.

Izosimov also said that while harsh competition will have a pressure on average revenue per user, or ARPU, it won't necessarily pressure the company's margins.

"We already have ARPU of $5 (the same as planned for Ukraine) in some Russian regions and we can still have a margin of over 40%," he said.

Avdeyev said he believes the real penetration rate, or the amount of Ukrainians using mobile phones, is about 40% rather than the 58% reported by research agencies. He attributed the difference to operators offering free SIM-cards as new year gifts that won't be used later.

Company Web site: http://www.vimpelcom.com

-By Anna Ivanova-Galitsina, Dow Jones Newswires; +7 095 974 80 55; anna.galitsina@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 19th January 2006