The Russian mobile operator is committed to expanding into the Commonwealth, Pryanishnikov said, pointing out that mobile phone penetration across the CIS is much lower than in Russia. These countries offer considerable prospects for growth but also pose some additional risks; accordingly, CIS assets will bring about as much profit their Russian counterparts in the short term.
Pryanishnikov says the CIS, rather than countries further abroad, has been chosen as the priority are for expansion because local networks use the same type of systems, and the VimpelCom brand is well-known. The Russian operator is currently negotiating the acquisition of some local companies and has applied to CIS governments for licenses. Pryanishnikov admitted, though, that attractive mobile operators do not come cheap.
In Kazakhstan, for instance, VimpelCom bought the local operator K-mobile - with its entire infrastructure, good coverage, and over a million subscribers - for $350 million, or about $350 per subscriber. Of course, it would have been cheaper to VimpelCom to build its own network at about $100 per subscriber, but there would have been few customers for a considerable time, and the company would have suffered losses. With these factors in mind, Pryanishnikov argues, costs are about the same when you buy an operational network and when you enter a competitive market with a new one.
When asked if Russian mobile operators had any real chances of expanding further abroad, Pryanishnikov said VimpelCom was not holding any talks on this.
