Moscow, Russia – December 12, 2005 – Mobile TeleSystems OJSC (“MTS” — NYSE: MBT), the largest mobile phone operator in Russia and the CIS, announces the acquisition of a 51% stake in Bitel, the leading mobile phone operator in the Kyrgyz Republic.
MTS has completed an acquisition of a 51% controlling stake in Tarino Limited for $150 million with an option to purchase the remaining ownership in the company by the end of 2006. Tarino Limited is the indirect owner, through its 100%-owned subsidiaries, of Bitel, a mobile operator holding a GSM—900/1800 license for the entire territory of Kyrgyzstan. The acquisition was made through MTS Finance S.A. – a 100% beneficially owned subsidiary of MTS, registered under the laws of Luxembourg.
Kyrgyzstan, a country in Central Asia, has a population of 5.1 million1. Mobile penetration in the country is around 9%2 and fixed—line penetration is estimated at around 8%3. As of November 2005, Bitel provided services to approximately 470 thousand subscribers. Bitel is the only GSM operator in the country (the company’s license is valid until February 2018) and holds an 87%2 market share; two other operators offer services in D-AMPS and CDMA standards. Kyrgyzstan becomes MTS’ sixth country of operations.
The company’s infrastructure is based on Huawei, Ericsson and Siemens equipment. Its network covers around 70%4 of the country’s population. In the first half of 2005, Bitel’s revenues amounted to $22.8 million5. The company’s average monthly revenue per user (ARPU) was $11. The company’s debt is insignificant.
“We continue to expand the geography of our business by investing in countries that offer attractive growth prospects. This acquisition further consolidates our leading position in countries of the former Soviet Union. We will apply our best practice to successfully develop the operations of Bitel and contribute to the development of a cutting-edge telecommunications infrastructure in the Kyrgyz Republic,” highlighted Vassily Sidorov, MTS’ President and CEO.
1
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According to the National Committee on Statistics of the Kyrgyz Republic as of June 1, 2005. |
2
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According to AC&M-Consulting as of September 30, 2005. |
3
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According to Comnews, information as of end of March 2005. |
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According to Bitel as of July 2005. |
5
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As reported in the statutory financial statements of Bitel, which were prepared in accordance with Kyrgyz accounting regulations. These amounts may differ to amounts reported under accounting principles generally accepted in the United States. |
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