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Sep 15, 2011 2:48 PM CET

CMD2011 Summaries: Dmitry Strashnov

Strong Customer Intake Maximize Our 2G Opportunity

Tele2 Russia represents 29% of sales in the group and has today more than 20 million subscribers, making us mobile operator number 4 in Russia both in terms of subscribers and revenue. We are present in 43 regions of Russian Federation and operate on the spectrum of 1800 MHz in those regions.

Current focus in Russia is to continue the strong growth in customer intake, maximizing the 2G opportunity.  We will also ensure that newcomer and challenger regions reach the same operational trends as the old ones. Furthermore, we will evaluate possibilities to expand carefully its operations through new licenses, as well as complementary acquisitions.

We have a great potential in turning our newcomer regions into challengers, and eventually defenders.

We are also comfortable with our current license situation for the coming couple of years and until we have bridged Tele2 into the next digital era.

Old regions:

We are defending and growing our position in the old regions. Subscriber base is growing, ARPU is fluctuating but growing, and annualized churn is stable.

In terms of financials, the profitability profile is solid with growing revenue and EBITDA, including market shares in terms of subscribers and revenue.

New regions:

In our new regions, we are experiencing a customer base growth at an impressive speed and it will continue to grow for the next coming years. Profitability is growing. All in all, when compared to the old regions, the new ones offer great potential. We need to invest in brand awareness, which will drive market share and revenue.

Russian mobile forecast indicates that in the coming few years we’ll have enough resources to grow our business, considering that 2G will remain the main technology until around 2015. Thereafter, 4G will face rapid growth. We are cautiously optimistic about the regulatory development and we hope to be one of the operators running LTE services in Russia.