Major Russian carrier buys operators in Urals, Siberia, Far East

MOSCOW—Major Russian Mobile TeleSystems (MTS) carrier said it had completed a deal to buy an 81-percent stake in the Telecom 900 Company, which has a controlling interest in three regional carriers in the Urals, Siberia and the Far East.
The statement followed the announcement of a merger of competing North-Western GSM, Sonic Duo and six regional carriers into a single company, which would manage the pan-Russian Megafon project.
“We are convinced that he who comes first will win the fight for the regions. MTS was the first Russian carrier to understand the importance of regional expansion and risk to be the first to embark on that path,” MTS President Mikhail Smirnov said.
While the Megafon project has just been launched only in North Caucasus, MTS expanded its licensed territory to 46 out of 89 Russian regions with the purchase of Telecom 900, which controls Siberian Cellular Systems-900 (CCC-900), the Uraltel and the Far Eastern Cellular Systems-900. In the future the three carriers, which now have a total of 177,000 subscribers in an area with 9 million people, will operate under the MTS trademark.
The deal helped MTS expand operations to an area with 56 percent of the Russian population or 84 million people. Megafon targets 80 percent of the population or 122 million people.
MTS also continues talks to buy the Kuban GSM carrier, which now competes with Megafon in North Caucasus and the SMARTS carrier on the Volga. In addition, MTS is vying for a GSM license in neighboring Belarus.
The second-biggest Russian carrier Vimpelcom (BeeLine) earlier also announced ambitious plans of regional expansion with US$600 million of investments. Vimpelcom also is vying for the Belarussian license and is eyeing the Ukrainian market.