Samsung to Give Russia's Euroset Distributor Status

MOSCOW, April 18 (Prime-Tass) -- South Korean electronics equipment producer Samsung is likely to grant Russian mobile handset retailer Euroset status as an official distributor of Samsung products, a source in Samsung said, Vedomosti business daily reported Tuesday.

Euroset and Samsung signed an agreement April 14 on strategic partnership and plan to make an official announcement on Wednesday, the daily said without citing a source.

Under the agreement, Samsung will give Euroset the largest credit line possible, with a 60-day maturity period, a full range of Samsung handsets and other advantages, Eldar Murtazin, analyst with Mobile Research Group, told the daily.

The deal puts an end to a feud between the Korean producer and the Russian retailer.

Disagreements between Euroset and Samsung arose in August 2005 when Euroset Chairman Yevgeny Chichvarkin blamed Samsung for failure to meet mobile handset delivery targets. Chichvarkin consequently asked Euroset employees to focus on selling phones of other producers and threatened to fire Euroset employees who personally used Samsung phones.

The conflict led to a decrease in Samsung's sales through Euroset, Russia?s largest mobile phone retailer, to 1.7% of total sales in January-March from 7.1% in 2005.

The two companies also clashed in mid-2002 and January 2004 as a result of disagreements over mobile phone supplies.

Euroset operates over 3,400 outlets in Russia, Belarus, Ukraine, Kazakhstan and Kyrgyzstan.

Euroset's sales amounted to U.S. $2.574 billion in 2005, up from $968 million in 2004.

Samsung accounted for 19.0% of the Russian mobile handset market in 2005, when sales amounted to 33.5 million units, according to Euroset.

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Posted to the site on 18th April 2006