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Russia’s Big 3 Mobile Operators to Cut Roaming Fees

Oct. 20 (Bloomberg) -- Russia’s three biggest mobile-phone operators will cut roaming fees “voluntarily” after Prime Minister Vladimir Putin criticized companies for charging too much.

The companies will cut domestic and international roaming and data transmission fees by at least a third from Dec. 1, Putin said during a meeting with Igor Artemyev, head of the federal anti-monopoly service, according to a transcript on the government’s website today. The three biggest operators are OAO Mobile TeleSystems, VimpelCom Ltd. and OAO MegaFon.

“This is a positive news for investors,” Viktor Klimovich, a telecommunications analyst at VTB Capital, said in a phone interview from Moscow. “The companies cooperated with the anti-monopoly agency and came up with a compromise which is not going to affect companies’ bottom line.”

The price cut may result in the mobile operators’ revenues declining as much as 0.5 percent, which is “less than the market expected,” Klimovich said.

The three operators have been expanding abroad after gaining control of more than 85 percent of the domestic market. Mobile-phone subscribers in Russia increased to 216.4 million in August from 201.8 million a year earlier, according to market researcher Advanced Communications & Media.

The Russian mobile operators charge an average of 70 rubles ($2.27) a minute for making phone calls while abroad, according to VTB’s Klimovich. That compares with the 49 euro cents ($0.68) a minute cap set for mobile operators in the European Union in 2007. Charges in the EU have decreased further since then.

Investigation

Putin said in April he had ordered the anti-monopoly agency to investigate why the rates were more expensive in Russia than elsewhere in Europe.

“We accused the companies of inflating prices and creating so-called monopolistically high prices,” Artemyev told Putin today. “Together with the Communications Ministry, we persuaded the companies to voluntarily cut roaming rates.”

MTS and Vimpelcom are cutting roaming prices this year in countries of the Commonwealth of Independent States where they have operations, according to Irina Osadchaya, a spokeswoman at MTS, and Anna Aybasheva, a VimpelCom spokeswoman. The two companies are also in talks with other international operators to reduce roaming rates globally.

Megafon will cut roaming prices from Dec. 1 in some CIS countries and Finland, the company said in a statement today.

To contact the reporter on this story: Anastasia Ustinova in St. Petersburg at austinova@bloomberg.net

To contact the editor responsible for this story: James M. Gomez in Prague jagomez@bloomberg.net

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