PRESS: Chechnya's PM Says May Shut Down MegaFon's Operations

MOSCOW, Mar 13 (Prime-Tass) -- Russia?s third largest mobile operator MegaFon may be forced to stop operations in Russia's constituent republic of Chechnya if it does not improve quality and reduce tariffs, Chechnya's Prime Minister Ramzan Kadyrov said, Vedomosti business daily reported Monday.

If the company does not improve its operations in two weeks, the regional government may choose another company to provide mobile services in the republic, he added. It was not clear how the prime minister of the region may force the mobile operator out.

MegaFon is currently the only mobile operator in Chechnya. It charges on average 4.5 rubles per minute, which is 30%-40% higher than in other regions, Yuri Grechko, spokesman of MegaFon's subsidiary Mobicom-Kavkaz, said. But costs are also "80%-100% higher compared with adjacent regions," he said, adding that the region lacks the necessary infrastructure and MegaFon itself has to ensure the security of its base stations.

Grechko said that MegaFon only started operations in March 2003 and currently operates 136 base stations in the republic and plans to launch 60 more base stations this year.

Russia?s second largest mobile operator VimpelCom has a license to operate in Chechnya, but the company awaits approval from local law enforcement, while Russia?s largest mobile operator Mobile TeleSystems (MTS) is not licensed to operate in the republic.

MegaFon's subscriber base in the war torn and terrorized Chechnya stands at about 300,000 users, according to iKS-Consulting.

(28.0203 rubles - U.S. $1)

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Posted to the site on 13th March 2006