Market News
Growth Continues in November 2003
Top 10 Cellular Operators
| # | Company | November 30, 2003 | October 31, 2003 |
|---|---|---|---|
| 1 | MTS | 15,763,000 | 15,050,000 |
Moscow | 4,709,052 | 4,605,000 | |
Ukraine (UMC) | 2,800,000 | 2,700,000 | |
Belarus | 405,000 | 360,000 | |
| 2 | Vimpelcom | 10,498,000 | 9,915,000 |
Moscow | 5,420,000 | 5,270,000 | |
| 3 | MegaFon | 5,817,225 | 5,600,296 |
Moscow | 803,554 | 767,502 | |
Tajikistan | 10,000 | 9,500 | |
| 4 | SMARTS Group | 1,080,000 | 1,027,000 |
| 5 | Uralsvyazinform | 1,066,400 | 1,007,500 |
| 6 | Sibirtelecom | 439,900 | 424,300 |
| 7 | N.Novgorod Cellular | 334,444 | 317,029 |
| 8 | Dal Telecom International | 175,632 | 165,382 |
| 9 | Ekaterinburg Cellular Communications | 172,774 | 169,669 |
| 10 | New Telephone Company | 136,534 | 130,180 |
Russian Cellular Market Breakdown | Russian Net Additions, November 2003 |
Russian Mobile Subscribers
| Mobile Subscribers | Nov. 30, 2003 | Oct. 31, 2003 |
|---|---|---|
| Russia | 33,520,000 | 31,920,000 |
| Penetration | 23.1% | 22.0% |
| Moscow | 10,987,606 | 10,697,502 |
| Penetration | 64.7% | 63.0% |
| St.Petersburg | 3,338,643 | 3,233,948 |
| Penetration | 52.7% | 51.0% |
Recent events:
- On November 1st MCC launched IMT-MC-450 network in Moscow under SkyLink brand.
- MTS and Vimpelcom announced 9M 2003 financial results.
Moscow Market
First month of MCC's IMT-MC-450 network operations did not changed much in net additions breakdown. GSM operators continue to dominate the market in the capital of Russia.
Moscow market demonstrates signs of mid-term saturation. We expect that in 6-9 month the pace of growth in Moscow region will noticeably slow down.
Moscow Market Breakdown | Moscow Net Additions, Nov 2003 |
Two New Millionaires on the Market
Uralsvyazinform and SMARTS reached 1 mln subscribers while MTS has stepped over 15 mln threshold. Ukrainian an Belorussian operations added almost 200 thsd of new subs for the company. Top five operators significantly outperform other players.
Top 10 Cellular Operators
| # | Company | October 31, 2003 | September 30, 2003 |
|---|---|---|---|
| 1 | MTS | 15,050,000 | 14,270,000 |
Moscow | 4,605,000 | 4,490,000 | |
Ukraine (UMC) | 2,700,000 | 2,550,282 | |
Belarus | 360,000 | 310,000 | |
| 2 | Vimpelcom | 9,915,000 | 9,250,000 |
Moscow | 5,270,000 | 5,065,000 | |
| 3 | MegaFon | 5,600,296 | 5,342,625 |
Moscow | 767,502 | 755,910 | |
Tajikistan | 9,500 | 9,000 | |
| 4 | SMARTS Group | 1,027,000 | 970,000 |
| 5 | Uralsvyazinform | 1,007,500 | 947,600 |
| 6 | Sibirtelecom | 424,300 | 405,000 |
| 7 | N.Novgorod Cellular | 317,029 | 295,738 |
| 8 | Ekaterinburg Cellular Communications | 169,669 | 165,234 |
| 9 | Dal Telecom International | 165,382 | 150,711 |
| 10 | New Telephone Company | 130,180 | 116,7881 |
Russian Cellular Market Breakdown | Russian Net Additions, October 2003 |
Russian Mobile Subscribers
| Mobile Subscribers | Oct. 31, 2003 | Sep. 30, 2003 |
|---|---|---|
| Russia | 31,920,000 | 30,280,000 |
| Penetration | 22.0% | 20.9% |
| Moscow | 10,697,502 | 10,326,000 |
| Penetration | 63.0% | 60.8% |
| St.Petersburg | 3,233,948 | 3,123,000 |
| Penetration | 51.0% | 49.2% |
Recent events:
- Penetration in St.Petersburg is over 50%.
- On November 1st MCC launched its IMT-MC-450 network in Moscow.
- On November 4th Vimpelcom has announced that the company has more than 10 mln subscribers
Moscow Market
Moscow Market Breakdown | Moscow Net Additions, Oct 2003 |
Regional Mobile Growth In Full Swing
Russian mobile market grew by record 1.8 mln users in September 2003 fueled mainly by strong growth in regions. Moscow and St.Petersburg together added about 600 thousand of new subscribers while regional networks attracted the remainder bringing penetration of mobile services to 20.9%.
If the trend persists, there will be over 35 mln of cellular users in Russia by year-end 2003.
Top 10 Cellular Operators
| Company | September 30, 2003 | August 31, 2003 | ||
| Total | Moscow | Total | Moscow | |
| MTS* | 14,270,000 | 4,490,000 | 13,280,000 | 4,390,000 |
| Vimpelcom | 9,250,000 | 5,025,000 | 8,530,000 | 4,835,000 |
| MegaFon** | 5,342,625 | 755,910 | 4,942,745 | 593,643 |
| SMARTS Group | 970,000 | 915,000 | ||
| Uralsvyazinform | 947,600 | 869,800 | ||
| Siberia Telecom | 405,000 | 352,744 | ||
| N.Novgorod Cellular | 295,738 | 279,087 | ||
| Ekaterinburg Cellular Communications | 165,234 | 161,490 | ||
| Dal Telecom International | 150,711 | 134,453 | ||
| New Telephone Company | 116,7881 | 107,387 | ||
* including UMC of Ukraine (2.55 mln), MTS Belarus subscribers (310,000) and recently acquired Tomsk Cellular Communications (195,000)
** including 9,000 in TT-Mobile (Tajikistan)
Russian Cellular Market Breakdown
Penetration in Moscow and St.Petersburg is significantly higher compared to the rest of the country so it comes as no surprise that the cellular growth finally spilled over to regions.
Russian Mobile Subscribers
| Mobile Subscribers | Sep. 30, 2003 | Aug. 31, 2003 |
| Russia | 30,280,000 | 28,480,000 |
| Penetration | 20.9% | 19.6% |
| Moscow | 10,326,000 | 9,870,000 |
| Penetration | 60.8% | 58.1% |
| St.Petersburg | 3,123,000 | 2,971,000 |
| Penetration | 49.2% | 47.2% |
Vimpelcom has won the September race for new users in St.Pete for the first time since launching its network in the region. The company earned 34% of net additions followed by MTS (29%) and MegaFon (25%).
Moscow Market
Vimpelcom's Moscow client base grew over 5 mln with 190 thsd of new users added in September. The company leads in Moscow followed by MTS (4.49 mln) and MegaFon (0.756 mln).
MegaFon managed to attract a significant portion of net additions for the second month in a row. The company outperformed MTS thanks to its popular O'Lite tariff plan. MTS explains the slowdown in net additions by a high churn rate on its contract tariff plans resulted from swithching of its contract users to the company's pre-paid tariffs started two month ago.
Moscow Net Additions, August 2003
Vimpelcom Leads in Moscow, MTS Expands in Russia
Top 10 Cellular Operators
| Company | August 31, 2003 | July 31, 2003 | ||
| Total | Moscow | Total | Moscow | |
| MTS* | 13,280,000 | 4,390,000 | 12,270,000 | 4,290,000 |
| Vimpelcom | 8,530,000 | 4,835,000 | 7,960,000 | 4,650,000 |
| MegaFon** | 4,942,745 | 593,643 | 4,653,450 | 513,257 |
| SMARTS Group | 915,000 | 860,000 | ||
| Uralsvyazinform | 869,800 | 789,329 | ||
| Siberia Telecom | 352,744 | 324,443 | ||
| N.Novgorod Cellular | 279,087 | 268,142 | ||
| Tomsk Cellular Communications | 183,904 | 169,926 | ||
| Ekaterinburg Cellular Communications | 161,490 | 155,600 | ||
| Tatincom | 118,606 | 120,239 | ||
* including UMC of Ukraine (2.4 mln) and MTS Belarus subscribers (250,000)
** including 8,500 in TT-Mobile (Tajikistan)
MTS finally completed SibChallenge deal (135,000 subscribers) and also acquired Primtelefon (91,000 subs) - a strategic asset for MTS providing access to Far Eastern territories. We have included both companies into MTS subscriber base displayed in the table above. With these transactions closed, only a few attractive independent cellular operators left in the country.
Russian Mobile Subscribers
| Mobile Subscribers | Aug. 31, 2003 | July 1, 2003 |
| Russia | 28,480,000 | 26,880,000 |
| Penetration | 19.6% | 18.5% |
| Moscow | 9,870,000 | 9,505,000 |
| Penetration | 58.1% | 55.9% |
| St.Petersburg | 2,971,000 | 2,841,000 |
| Penetration | 47.2% | 45.1% |
Russian Cellular Market Breakdown
Moscow Market
Megafon demonstrated strong growth in subscriptions for the second month in a row thanks to the new (and heavily promoted) O'Lite pre-paid tariff plan. Vimpelcom was again a winner in Moscow while MTS slowed down the pace. Nevertheless, we believe that MTS will be able to restore its share in net additions soon.
Moscow Net Additions, August 2003
Cellular Subscriptions Soar in July
Top 10 Cellular Operators
| Company | July 31, 2003 | June 30, 2003 | ||
| Total | Moscow | Total | Moscow | |
| MTS* | 12,270,000 | 4,290,000 | 11,490,000 | 4,135,000 |
| Vimpelcom | 7,960,000 | 4,650,000 | 7,455,000 | 4,435,000 |
| MegaFon** | 4,653,450 | 513,257 | 4,255,000 | 440,300 |
| SMARTS Group | 860,000 | 807,700 | ||
| Uralsvyazinform | 789,329 | 739,060 | ||
| Siberia Telecom | 324,443 | 298,331 | ||
| N.Novgorod Cellular | 268,142 | 248,025 | ||
| Tomsk Cellular Communications | 169,926 | 158,400 | ||
| Ekaterinburg Cellular Communications | 155,600 | 143,500 | ||
| SibChallenge | 135,000 | 128,000 | ||
*including UMC of Ukraine (2.2 mln) and Belarus subscribers (210,000)
** including 8,100 in TT-Mobile (Tajikistan)
MTS, the prominent market leader, is approaching 10 mln milestone in Russia. The company also controls Ukrainian Mobile Communications with 2.2 mln users and has a JV in Belarus that enlisted 210,000 users by the end of July.
On August 6 Vimpelcom announced that it has reached 8 mln subscribers. Recently launched network in St.Petersburg attracted 23% of new subscribers in July which is a good result for the new market entrant. Vimpelcom now has more than 80,000 subs in St.Pete and the region.
MegaFon, third-largest Russian operator, also did a good progress in July attracting 23% of all new users in the country. It is likely that the company may break through 5 mln in August.
Please note that we did not consolidate SibChallenge subscriber base into MTS numbers despite the recently announced acquisition. We plan to start the consolidation as soon as the deal is officially closed.
Russian Cellular Market Breakdown, July 2003 | Shares in Net Additions, July 2003 |
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Moscow Market
In Moscow the miost significant news of the months is MegaFon's leap from 8% to 16% in net additions. Vimpelcom retains its leading position with MTS following the race.
MCC, the market outsider, is about to launch its IMT-MC network in 450 MHz under SkyLink brand.
Moscow Market Breakdown, July 2003 | Moscow Net Additions in July 2003 |
 |  |
Regions Accelerate
Total number of cellular subscribers reached 25 mln milestone while Moscow market grew over 9 mln subscribers. We expect that by the year-end 2003 Russian cellular market will expand to 32 mln users.
Top 10 Cellular Operators
| Company | June 30, 2003 | May 31, 2003 | ||
| Total | Moscow | Total | Moscow | |
| MTS* | 11,490,000 | 4,135,000 | 10,815,000 | 3,945,000 |
| Vimpelcom | 7,455,000 | 4,435,000 | 6,951,000 | 4,235,000 |
| MegaFon** | 4,255,000 | 440,300 | 4,009,393 | 407,936 |
| SMARTS Group | 807,700 | 758,400 | ||
| Uralsvyazinform | 726,000 | 659,500 | ||
| Siberia Telecom | 298,331 | 234,619 | ||
| N.Novgorod Cellular | 248,025 | 233,100 | ||
| Tomsk Cellular Communications | 158,400 | 145,799 | ||
| Ekaterinburg Cellular Communications | 143,500 | 129,800 | ||
| SibChallenge | 128,000 | 120,000 | ||
*including UMC of Ukraine (2 mln) and Belarus subscribers (170,000)
** including 7,200 in TT-Mobile (Tajikistan)
St.Petersburg Market, June 2003 | Net Additions in Regions, Including St.Petersburg |
 |  |
Vimpelcom has more than 50,000 users in St.Petersburg - the number that the company reached in 2.5 months of operations in the city. The company also enlisted its subscriber #7,000,000 in June.
Russian Cellular Market Breakdown, June 2003
NOTE: The chart above includes only Russian subscribers, all CIS networks are excluded from the calculation.
Moscow Market
Total market size in the Moscow license area has reached 9 mln users bringing cellular penetration in the region to 53%. According to the preliminary results of 2002 nation-wide census, population of Moscow and region is 17 mln. Since the final results of the census are not available, we shall use the preliminary data from now on.
In June Vimpelcom became a leader in Moscow net additions regaining the position lost to MTS in December 2002.
Moscow Net Additions in June 2003
