MTS Completes Acquisition of Telekom XXI
Moscow, St. Petersburg, Russian Federation — 22 May 2001 — Mobile TeleSystems OJSC (NYSE: MBT), Russia’s largest mobile operator, today announced it has completed acquisition of Telekom XXI OJSC.
Under the terms of the agreement, MTS acquired Telekom XXI for 50 million dollars.
Telekom XXI has GSM 900/1800 licenses to operate in ten regions of Russia: St. Petersburg, Karelia Republic, Nenetsky autonomous district, Leningrad, Arkhangelsk, Vologda, Kaliningrad, Murmansk, Novgorod and Pskov Regions. The total population of the company’s license areas is 13,4 million people.
Telekom XXI currently operates its network in St. Petersburg, which integrates a switch and 15 base stations by Ericsson.
Acquisition of Telekom XXI enlarges MTS’s license territory to 43 regions of Russia with a population of 80 million people, or more than 55% of the country’s total population.
Commenting on the acquisition, Mikhail Smirnov, President of Mobile TeleSystems OJSC, said: “Today we are announcing a very significant event in the development of MTS. Entering the second most important market in Russia offers MTS great potential. Penetration rate in the St. Petersburg license area is under 7%. It is clear that the capacity of the market is much larger than this and competition will change the situation even faster. We expect the development of mobile communications in St. Petersburg to repeat the growth experienced in Moscow, with mobile communications becoming available to the mass market”.
Mobile TeleSystems OJSC plans to create a full GSM 900/1800 network in St. Petersburg license area. By the end of this year, the network will integrate a switch with an initial capacity of 100,000 numbers and 120 base stations. Installation of these base stations will provide for practically full MTS cellular coverage in St. Petersburg and on the Moscow – St. Petersburg highway from the border of Tver region. Therefore, MTS will provide continuous cellular connection along the road between the most important cities of the country.
Planned investments into network development in the North West Region by the end of 2001 will constitute 80 million dollars.
The launch of the network is planned in the fourth quarter of 2001. 100%-owned subsidiary of MTS, Telekom XXI, will provide services of cellular communications in the North-Western Region of Russia under the trademark “Mobile TeleSystems” (“MTS”).
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For further information contact:
MTS
Press Secretary
Eva Prokofyeva
tel: +7 (095) 104-49-38
e-mail: eva@mts.ru
Investor Relations department
tel: +7 (095) 766-01-03
Fax: +7 (095) 766-01-00
e-mail: ir@mts.ru |
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of MTS, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statement to conform them to actual results. We refer you to the documents MTS files from time to time with the U.S. Securities and Exchange Commission, specifically, the Company’s most recent Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors,” that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, dependence on new service development and tariff structures; rapid technological and market change, acquisition strategy, risks associated with telecommunications infrastructure, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.
Mobile TeleSystems OJSC (NYSE: MBT) is Russia’s leading GSM 900/1800 mobile cellular operator. MTS has GSM 900/1800 licenses to provide mobile cellular telephony services in 43 regions of the Russian Federation, covering 55% of the country’s population. It has commenced operations in 21 regions covering more than 41 million people. Information about MTS’s activities and services can be found on MTS website at https://www.mtsgsm.com. |
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