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MegaFon has won the race


Buying a Primoriye region operator "New Telephone Company" (NTC) has not helped Vimpelcom to hold the second largest mobile sales in Russia. InAugust MegaFon surpassed it by this indicator

Revenues from mobile business of MegaFon in Russia in August was higher than that of Vimpelcom which allowed it to regain second place after the MTS by this indicator. This follows from the monthly report of "J'son & Partners", told "Vedomosti" two sources close to "the big three" operators and confirmed an employee of MegaFon. Vimpelcom and MegaFon both officially declined to comment data of "J'son & Partners". CFO of "J'son & Partners" Pavel Ermolich says he doesn't know about such report.

These figures are informal, since the operators do not publish their monthly financial results. In 2010, the quarterly results confirmed the trend. In September 2010, MegaFon first left Vimpelcom behind on mobile revenues in Russia.

Formally MegaFon has become the second at the end of III quarter 2010. This was expected, since as far back as April 2010, MegaFon has outran Vimpelcom in terms of subscribers and is still the second.

But in June 2011 Vimpelcom was again in second place in terms of revenue - a purchase of a cellular market leader of the Primoriye region NTC for $380 million helped to do so. Vimpelcom also reduced the gap with MegaFon in terms of subscribers.

The distance between MegaFon and Vimpelcom is short, says a source in one of the operators. MegaFon could get ahead of competitors by connecting new customers and higher prices for voice calls, he says. Prices have been increased before by Vimpelcom too and this has led to an outflow of subscribers, he concluded. MegaFon did not increase the price per minute ofconversation, said its representative Julia Dorokhina. In her words, income growth of MegaFon was helped by the seasonal rise in voice and Internet traffic, revenues from roaming and active development of company's own retail network.

The average price per minute (APPM) in Vimpelcom according to "J'son & Partners" over the past year fell from 84 to 69 cents, said a source in a cellular communications operator. Whereas MegaFon since March is steadily increasing this figure. The cost per minute of Vimpelcom is still higher - in August APPM of MegaFon was 58 cents. In the II quarter of 2011 each subscriber brought MegaFon on average 313 rubles per month, talking 295 minutes. Subscribers of Vimpelcom talked less - 244 minutes, but paid more - 327 rubles. |

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