Markets
- Eastern and
Central Europe
Pannon in Hungary
Telenor’s wholly owned mobile operation Pannon is Hungary’s number-two mobile
operator. Pannon currently holds two GSM licenses (GSM 900 and GSM 1800). In
December 2004, the company was awarded a UMTS license.
Pannon offers advanced voice and nonvoice services to both prepaid and contract subscribers. Pannon’s voice services include international connections through Voice over Internet Protocol (VoIP), which enables the company to offer subscribers lower costs on international calls. Non-voice services include SMS, MMS, mobile content services and services to Internet service providers via Internet Protocol and WAP. Pannon launched EDGE-based broadband services in February 2005 and UMTS-based broadband services in October 2005.
Pannon has positioned itself as a highquality provider with up-to-date features, competitive rates and quality customer service. Pannon has recently targeted the youth segment, providing offers for select services under the djuice brand.
In addition to 39 Pannon-owned regional service centres, Pannon markets its products through a nationwide network of agents and sales outlets on an exclusive basis. During 2006, Pannon will be restructuring its distribution network by outsourcing 29 of its own sales outlets to various franchisees. Five sales outlets will be kept as ‘‘flagship’’ stores, another five will be closed down.
Kyivstar in Ukraine
Telenor holds a 56.5 per cent ownership interest in Kyivstar, Ukraine’s largest
mobile operator. Kyivstar currently holds a GSM 900 and a GSM 1800 license.
At year-end 2005, Kyivstar’s GSM network offered a geographical coverage of
approximately 92 per cent and population coverage of approximately 96 per cent.
Kyivstar’s network is fully GPRS upgraded.
In 2005, Kyivstar launched EDGE services, which at year-end were operational at approximately half of the base stations in the ten largest cities in Ukraine. Kyivstar also continued to roll out its own fibre backbone network during 2005.
In addition to voice, Kyivstar also provides voice messaging services, SMS, MMS and mobile Internet services. Kyivstar focuses on providing quality customer service and customer care. At year-end 2005, Kyivstar had 72 visitor centres throughout Ukraine. The visitor centres are independent dealerships, but all of them have at least one Kyivstar employee among its staff. At year-end 2005, Kyivstar also operated 18 information centres in key urban areas.
ProMonte in Montenegro
Telenor’s wholly owned subsidiary ProMonte is Montenegro’s leading provider
of mobile communications services. ProMonte holds a GSM 900 and a GSM 1800 license.
At year-end 2005, ProMonte’s GSM network had achieved a geographical coverage
of approximately 75 per cent and population coverage of 98.7 per cent.
Since it first launched GSM services in 1996, ProMonte has positioned itself as an innovative quality operator within all segments, focusing on simplicity and user-friendliness. The company offers mobile voice, roaming, value-added services and mobile data services over GPRS to subscribers on both prepaid and contract basis. ProMonte provides EDGE coverage in most big cities and urban areas.
At year-end 2005, ProMonte markets and distributes its services through independent dealerships with 2,013 points of sale, including two wholly owned sales outlets in the capital, Podgorica. During 2005, ProMonte entered into ‘‘shop-in-shop’’ agreements with six independent dealerships, which committed themselves to market ProMonte’s mobile services within their shops.
VimpelCom in Russia and CIS
VimpelCom is a key affiliate of Telenor and Russia’s second largest mobile operator,
with an overall market share of 34.3 per cent at year-end 2005. VimpelCom’s
ADSs are listed on the New York Stock Exchange and registered with the SEC.
VimpelCom has subsidiaries in Kazakhstan, Uzbekistan and Tajikistan. VimpelCom’s
ownership of Ukrainian Radio Systems (URS) in the Ukraine is currently the subject
matter of litigation between Telenor and VimpelCom.
On 20 March 2006, Telenor made a proposal for VimpelCom to acquire full ownership of Kyivstar, Telenor’s consolidated mobile operation in Ukraine, in which Telenor holds a 56.5 per cent ownership interest, at a price of more than USD 5 billion in cash. A condition to Telenor’s proposal is that Telenor and Alfa Group enter into a market based separation mechanism. If implemented and activated, this mechanism would permit the party placing the highest value on VimpelCom to make an offer for all of the other party’s shares and obligate the other party to dispose of its entire shareholding.
In Russia’s Far Eastern region, VimpelCom operates in four sub-regions through its subsidiaries Sakhalin Telecom and Dal Telecom International.
VimpelCom operates a GSM 900/1800 network, as well as several small AMPS/ D-AMPS networks, that target both the business and consumer segments. VimpelCom’s Russian license portfolio covers approximately 94 per cent of the population. VimpelCom offers voice services and value-added services on its GSM and D-AMPS networks on both prepaid and contract basis, with around 99 per cent of its Russian subscribers using GSM.
As part of its overall business strategy, VimpelCom has constructed and tested a pilot UMTS network, and intends to introduce UMTS services in some of the larger cities if awarded a UMTS license.