Nizhny Novgorod, November, 2004: Volga Telecom approved its cellular business development strategy and the plan for its implementation at a recent BoD meeting.

 

The purpose of Volga Telecom’s strategy is to strengthen its position on the cellular market, improve efficiency of its cellular business and the competitive advantages of its GSM assets by integrating its cellular and fixed-line operations. This will boost the telecom carrier’s financial indicators, raise profit margins and market capitalization.

 

To achieve these targets, Volga Telecom intends to take a number of measures to secure its presence in the regions which are beyond its cellular network, i.e. to obtain a GSM-1800 license for the regions where it is not GSM licensed (Samara, Kirovregions and Republicof Udmurtia) or increase the charter capital in regional cellular operators. At present, Volga Telecom holds stakes in charter capitals of 9 cellular entities: five controlling stakes in the following companies: CJSC Nizhny Novgorod Cellular Network, CJSC Ulyanovsk-GSM, CJSC Orenburg-GSM, OJSC Tatincom-T and CJSC Saratov Mobile. Cellular services in the Republicof Maryi Elare offered by Volga Telecom’s branch. Thus, Volga Telecom plans to launch negotiations aimed at raising its stakes in the charter capital of CJSC Saratov Mobile, CJSC Chuvashia Mobile and CJSC Penza Mobile.

 

At this stage of strategy implementation Volga Telecom has created a special department to manage its cellular assets. In line with the strategy, the telecom operator has plans to merge its cellular assets into a single cellular operator, as the Company has announced previously on numerous occasions.

 

Apart from its cellular asset development strategy, Volga Telecom’s BoD also reviewed a model on restructuring its subsidiaries. Based on in-depth analysis of activities carried out by the telecom operator’s subsidiary and related companies, several options were proposed for participation in these entities. The restructuring provides for participation and increase of the telecom carrier’s stakes in promising core assets and divestment of its loss-making and unpromising assets.