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Friday, June 16, 2006

Russian Cell Phone Industry Crashes, Exposing Russia's 80% poverty

RIA Novosti reports:

MOSCOW, June 15 (RIA Novosti) - MTS [RTS: MTSS], Russia's largest mobile phone operator, said Thursday its net profit for January-March 2006 had declined 20.7% year on year, to $184.4 million. Revenue during the first quarter totaled $1.289 bln, up 21.9% on the same period of 2005. Operating income slipped 1.3% to $334.2 mln, while EBITDA grew 11.5% to $598.6 mln. The company's consolidated subscriber base rose by 2.86 million during the first quarter. "MTS has gained a leading position in Russia, with a market share of around 35%," the company said. MTS said its market share in Ukraine rose to 44% during the period, 57% in Uzbekistan, 75% in Turkmenistan, but edged down in Belarus, from 52% to 51%. MTS posted a U.S. GAAP net profit of $1.13 billion in 2005, a 14% increase on 2004.

It's tough to maintain growth in a business like cell phones when, by world standards, 80% of your market is living in conditions of poverty.

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