Mobile Content Russia

Russia's Svyazinvest is reported to have suspended plans to merge its mobile network subsidiaries with the smallest of the country's three dominant mobile networks, MegaFon. (Though by some reports MegaFon overcame VimpelCom in April and now it's the second largest mobile operator in Russia in terms of subscribers base - Mobile Content Russia note). A Svyazinvest spokeswoman told Dow Jones News that the company is no longer negotiating with Megafon and the proposal is on hold until next year. No explanation was given for why the talks were suspended.

Svyazinvest is primarily a landline operator, but also owns 14 mobile networks, which operate in four federal districts. The mobile networks had around 16 million subscribers at the end of last year, equivalent to a market share of 9%. A study carried out by consultants, McKinsey recommended merging the networks with another company.

Russian flag-carrier Aeroflot is to equip four of its aircraft with in-flight mobile communications capability developed by a domestic company.

Moscow-based mobile network operator MegaFon is to provide base stations to be fitted to Aeroflot's aircraft. The first jet to be fitted will be an Airbus A320, with the initial installation completed by summer 2010. Aeroflot will extend the service to an Airbus A330, and plans to equip two more A320s, by the end of the year.

MegaFon Caucasian branch has announced the launch of 3G network in Chechnya Republic. The carrier invested about 500 million rubles (17 million dollars) in building the network. Now 116 3G base stations operate in the republic, - altogether they provide high quality radio coverage on large scale. New 3G services will be available for all subscribers in 3G coverage area with UMTS handsets or special USB-modem.

MVNO «PROSTO dlya obscheniya» («Simply for communication») has announced that it has signed up more than 350,000 subscribers. Promotion campaign and pricing down of data plans have significantly improved the sales figures, - the company hopes to sign up half a million subscribers by the end of this year. In august the number of MVNO subscribers reached 260,000 users.

Colibria, in partnership with Acision, the world's leading messaging company, today announced that it has enabled Russia's largest operator, MTS, , to interconnect its 'Chat' Mobile Instant Messenger (MIM) service with MegaFon and VimpelCom (which operates under the Beeline trademark). This allows subscribers of the three operators to seamlessly exchange messages across their respective services. The new service, which will be jointly branded as 'Chat' across all three networks, builds on year-on-year growth in messaging for MTS since 2008. This trend is expected to continue by the expansion of messaging access across Russian subscriber communities.

Russia's smallest of the big three dominant operators, MegaFon has reported a 10.8% drop in second quarter profits, which it put down mainly to currency changes. The company reported a quarterly profit of RUB 9 billion (US$284.8 million), while revenues rose by 3.4 percent to RUB 43.9 billion (US$1.4 billion).

Sergey Soldatenkov, Chief Executive Officer of MegaFon, said: "We had a very good overall performance in the six months ended June 30, 2009, showing growth in financial indicators versus the corresponding period in the previous "pre-crisis" year. The first quarter of 2009 was not easy, our subscribers reduced their monthly usage and spending, and new subscriber additions slowed, but we were able to offset this by pursuing a conservative approach to costs and by efficient business management. As a result, by the end of the current period we managed to reverse the negative trends which were evident at the beginning of this year and were able, through effective marketing initiatives in the second quarter of 2009, to realize improved MOU and ARPU".

Russian cellular carrier MegaFon has launched bundled service В«Unlimited Internet with Opera MiniВ» for its subscribers in Moscow. Now MegaFon network users signed up to the package can view websites all day and night without any data transfer limits for only 0.22 dollars (7 Russian rubles) a day.

To use the new opportunity subscribers have to install Opera Mini mobile browser on their mobile phone and sign up to bundled services �Unlimited Internet with Opera Mini'.

J'son & Partners Consulting presents the key results of conducted research includes analysis of current situation and regions (America, Europe and Asia), a detailed review of mobile the further market development. The research contains the analysis of such mobile VAS as SMS, transfer, mobile commerce, mobile marketing and mobile TV.

Size and structure of Russian mobile VAS market

J'son & Partners Consulting estimates the volume of the mobile VAS market in Russia at 94 bln RUR (3.8 bln USD) in 2008, and at 55 bln RUR ($1.681 bln; at average currency rate 32,71 rubles per 1 US dollar) in the 1st half of 2009.

Further confusion over Iran's 3rd mobile license after Russia's MegaFon denied earlier reports that it had been awarded the contract. Although the company has previously suggested it would be interested in a license in the country, it is now saying that it has lost all such interest.

The Iranian TV channel, Press TV reported earlier this week that Megafon had been granted a license to build a mobile phone network in the country.

"MegaFon does not plan to enter the market of Iran," said Peter Lidov, PR Director of MegaFon. "We monitor opportunities to enter promising markets outside Russia but Iran is not among them", he added.

Fitch Ratings has changed the Outlooks on Russian mobile network operator, MegaFon's Long-term Issuer Default rating (IDR) and National Long-term rating to Positive from Stable. The change reflects Fitch's expectations that Megafon shareholders will ultimately be able to put in place a sustainable dividend policy that will be consistent with the company's creditworthiness.

At the same time, Fitch has affirmed the Long-term IDR and senior unsecured rating at 'BB+', the Short-term IDR at 'B' and National Long-term rating at 'AA(rus)'. MegaFon's US$375m eurobond due in December 2009, which is guaranteed by Megafon, is affirmed at 'BB+'.