VimpelCom Fourth-Quarter Profit Climbs on Subscriber Growth
By Ekaterina Shatalova and Diana ben-Aaron - Mar 29, 2011 4:30 PM GMT+0200
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Business ExchangeBuzz up!DiggPrint Email .VimpelCom Ltd. (VIP), the Russian company buying Wind Telecom SpA to create the world's sixth-largest mobile phone operator, said profit rose 63 percent in the fourth quarter as it added subscribers and consolidated units.
Net income advanced to $461 million from $283 million a year earlier, VimpelCom said in a statement. Sales gained 22 percent to $2.82 billion, the Amsterdam-based company said.
VimpelCom, which began operating in its current form last year, more than doubled its full-year capital expenditure in Russia to 47.6 million rubles ($1.68 million) and forecast more spending on infrastructure and marketing to capture growth from the economic recovery. The company also spent more to roll out broadband at its Kyivstar division in Ukraine.
"Our results reflect improvements in the macroeconomic conditions in our major markets, the consolidation of Kyivstar, as well as our efforts to drive further growth and improve the quality of our subscriber base," Chief Executive Officer Alexander Izosimov said in the statement.
VimpelCom this month won support from shareholders to pursue the Wind acquisition, which will be carried out by issuing new stock to Wind investors. The $6.5 billion deal will double VimpelCom's mobile customer base to about 173 million, adding subscribers in Italy, Canada, Pakistan, Bangladesh and Algeria.
The company plans to close the deal within a month, Izosimov told reporters today in Moscow. VimpelCom earlier said it expected to close it in the first half and forecast $2.5 billion in "synergies."
Roaming Coverage
Making it easy for subscribers to roam between Wind and VimpelCom coverage areas could be the next step in merging the companies, Izosimov said. VimpelCom would consider using a single brand across the merged company, although there are no plans to do so at present, he said.
An arbitration proceeding instituted by Telenor ASA (TEL), which owns more than 39 percent of VimpelCom and opposes the deal, is still pending.
VimpelCom increased its reported global mobile subscriptions by 43.5 percent to 92.7 million at year-end as it brought more countries into its new organization. The figure includes subscribers in Russia, Ukraine, Georgia, CIS countries including Kazakhstan, and southeast Asia. Russian subscribers gained 2.2 percent for the year to 52 million.
VimpelCom, which sells services under the Beeline brand, was the third-biggest mobile phone operator in Russia by subscribers in February according to data compiled by Bloomberg. It trailed OAO Mobile Telesystems, the biggest operator, and OAO MegaFon.
Operations in the company's Vietnamese joint venture will be resumed in the second quarter after resolving issues about financing and ownership structure, Izosimov said today, without elaborating. The company completed its purchase of a Laos unit from Millicom International Cellular SA this month.
To contact the reporter on this story: Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net
.
By Ekaterina Shatalova and Diana ben-Aaron - Mar 29, 2011 4:30 PM GMT+0200
inShare.1More
Business ExchangeBuzz up!DiggPrint Email .VimpelCom Ltd. (VIP), the Russian company buying Wind Telecom SpA to create the world's sixth-largest mobile phone operator, said profit rose 63 percent in the fourth quarter as it added subscribers and consolidated units.
Net income advanced to $461 million from $283 million a year earlier, VimpelCom said in a statement. Sales gained 22 percent to $2.82 billion, the Amsterdam-based company said.
VimpelCom, which began operating in its current form last year, more than doubled its full-year capital expenditure in Russia to 47.6 million rubles ($1.68 million) and forecast more spending on infrastructure and marketing to capture growth from the economic recovery. The company also spent more to roll out broadband at its Kyivstar division in Ukraine.
"Our results reflect improvements in the macroeconomic conditions in our major markets, the consolidation of Kyivstar, as well as our efforts to drive further growth and improve the quality of our subscriber base," Chief Executive Officer Alexander Izosimov said in the statement.
VimpelCom this month won support from shareholders to pursue the Wind acquisition, which will be carried out by issuing new stock to Wind investors. The $6.5 billion deal will double VimpelCom's mobile customer base to about 173 million, adding subscribers in Italy, Canada, Pakistan, Bangladesh and Algeria.
The company plans to close the deal within a month, Izosimov told reporters today in Moscow. VimpelCom earlier said it expected to close it in the first half and forecast $2.5 billion in "synergies."
Roaming Coverage
Making it easy for subscribers to roam between Wind and VimpelCom coverage areas could be the next step in merging the companies, Izosimov said. VimpelCom would consider using a single brand across the merged company, although there are no plans to do so at present, he said.
An arbitration proceeding instituted by Telenor ASA (TEL), which owns more than 39 percent of VimpelCom and opposes the deal, is still pending.
VimpelCom increased its reported global mobile subscriptions by 43.5 percent to 92.7 million at year-end as it brought more countries into its new organization. The figure includes subscribers in Russia, Ukraine, Georgia, CIS countries including Kazakhstan, and southeast Asia. Russian subscribers gained 2.2 percent for the year to 52 million.
VimpelCom, which sells services under the Beeline brand, was the third-biggest mobile phone operator in Russia by subscribers in February according to data compiled by Bloomberg. It trailed OAO Mobile Telesystems, the biggest operator, and OAO MegaFon.
Operations in the company's Vietnamese joint venture will be resumed in the second quarter after resolving issues about financing and ownership structure, Izosimov said today, without elaborating. The company completed its purchase of a Laos unit from Millicom International Cellular SA this month.
To contact the reporter on this story: Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Torrey Clark at tclark8@bloomberg.net
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