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Russia’s MTS looks eastward for expansion

MOSCOW-The major Russian Mobile TeleSystems (MTS) carrier decided to expand eastward and launched a GSM 900 MHz service in the Urals republic of Udmurtia in November.

Udmurtia, which has numerous industrial and manufacturing enterprises, became the 21st of 89 Russian regions where MTS is currently operating. The carrier joined efforts with the local Udmurt Telecom operator to launch the Siemens-equipped network, which currently includes eight base stations and is the only GSM service in the republic. At present, it can service up to 10,000 clients, but another eight base stations are to be built to expand the coverage.

MTS President Mikhail Smirnov said his company had already covered an area spreading from Moscow to the western borders of Russia, where 41 million people live. Now MTS is moving east and plans to cover three new regions in the near future. They are Nizhny Novgorod, Ivanovo and Kirov.

MTS is not the only Russian carrier planning to expand. Vimpelcom (BeeLine), the country’s second-biggest carrier, announced it is also planning to expand and is looking for a strategic partner to create a managing company for regional development.

Carriers focused on regions, such as the Moscow market, may soon face saturation. Experts assess the current boom in Moscow subscribers will slow down after the 4 million benchmark, when up to 30 percent of residents of the capital area would have cellular phones. The Moscow office of the J’Son & Partners telecom consultancy predicts the number of subscribers in the capital will grow from the current 1.8 million to 3 million by the end of third-quarter 2001. The 4 million benchmark is expected to be surpassed in 2002, telecom analyst Anton Pogrebinsky said.

MTS had a total of 870,000 subscribers in October, and only 51,000 of them were outside the Moscow area. However, the figure is rapidly increasing, and the carrier boasted 360-percent growth from 8,000 to 36,000 regional subscribers in the first half of 2000.

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