Tele2 Formally Awarded 14 GSM Licenses in Russia

STOCKHOLM -(Dow Jones)- Swedish telecom operator Tele2, Monday said Russia awarded it 14 new GSM1800 licenses, an expected move that will help expand the carrier's footprint to cover 34 regions and some 60 million people.

The company said last month that Russian authorities had allocated a total of 17 licenses to Tele2, but had only been officially awarded three at that time. Monday's news concerns the remaining licenses.

Global System for Mobile Communications, GSM is the dominant 2G mobile phone standard globally.

"We are very pleased with this allocation of new GSM licenses in Russia," said Tele2 Chief Executive Lars-Johan Jarnheimer. "It creates a great opportunity for us to remain the country's fastest growing mobile operator. We will continue to offer services that are easy to use and cheap to buy and we expect to launch mobile networks in the awarded regions by the end of 2009."

"The licenses were expected, but it does mean that Tele2 will be able to continue growing in the region over the next three to five years," said Swedbank Markets analyst Sven Skoeld, who has a buy rating and a target price of SEK156 on the stock. He said it would not affect his estimates for next year since it would take a while for the company to build the network infrastructure and get up and running.

After the license award, Tele2 has GSM licenses in 23 out of 28 regions in the North-West and Central Federal Districts, two licenses in the Southern Federal District, three licenses in the Volga Federal District, one license in the Urals Federal District and five licenses in the Siberian Federal District.

Tele2, like many other operators, are experiencing fast growth in the booming Russian market. Tele2 saw a 35% jump in third-quarter operating margin to SEK2.55 billion from SEK1.88 billion, while the average revenue per user increased to SEK56 from SEK52 in the same period.

At 0835 GMT, Tele2 shares traded up SEK1, or 0.7%, at SEK143.25, outperforming a broader lower Stockholm market.

-By Adam Ewing, Dow Jones Newswires; +46 8 545 130 95; adam.ewing@dowjones.com

(END) Dow Jones Newswires

Posted to the site on 10th December 2007