07 June 2004 03:36
Nokia to Ink $360M MegaFon Deal
Nokia will sell more than $360 million worth of equipment to No. 3 cellular operator MegaFon, sources close to the
deal said Friday.
The deal would be Nokia's biggest in Russia and significantly boost the Finnish giant's share of the
lucrative $1 billion GSM market.
An official announcement is expected Monday.
The contract would help Nokia move in on its Swedish rival Ericsson, which has been the exclusive supplier to
MegaFon's Moscow area operator Sonic Duo.
"Ericsson's monopoly is destroyed," said one source, who like the others spoke on the condition of
anonymity.
Nokia has already begun supplying equipment for the development of GSM and GPRS networks to Sonic Duo, the source
said.
A Nokia spokesman neither confirmed nor denied the information.
Ericsson's representative office in Moscow expressed surprise to learn Friday that it might have lost one of its
largest clients in Russia.
"I think you'll find that if you call MegaFon, they will tell you that we are still their supplier,"
said Ericsson spokeswoman Yelena Golikova.
MegaFon spokesman Andrei Klimov refused to confirm or deny that the company had signed a new deal with Nokia.
Nokia's biggest Russian contract to date -- last year's equipment deal with No. 2 operator Vimpelcom -- was
less than a fifth of the MegaFon deal.
Nokia said in April that it will sell an additional $60 million in equipment this year to Vimpelcom, which operates
under the Bee Line brand name.
Mobile TeleSystems is Russia's largest operator.
Last year, Ericsson, Germany's Siemens and France's Alcatel more or less equally split 70 percent of
Russia's 870 million euro-per-year GSM equipment market, according to market tracker AC&M Consulting.
If Nokia's new contract is confirmed, it would push up the company's market share considerably from its
current 14 percent, said AC&M's Alexander Shatikov.
"But I doubt they will be paid for everything this year. More likely this is a framework agreement without any
guarantees and could be spread over the next five years," he said.
AC&M expects the market to grow 5 percent to 7 percent this year.
With Moscow's cellphone market close to saturation, telecom operators are rapidly expanding coverage in the
regions, but also improving service in the capital.
"Investments into the Moscow market are aimed at improving the quality, not quantity of coverage," said
Troika Dialog analyst Yevgeny Golossnoi.
"If there is to be a large investment in Moscow, I would expect it to come from MegaFon, since their network is
the least developed of the big three operators."
.TX-..**********************************************
[The Moscow Times] |
RUSSIA IN FACTS
