8M06 Telecom Revenues up 22% yoy.

As usual, the mobile sector (40% growth yoy), and internet & data (12%) were the growth leaders. Fixed long-distance revenues decreased (-6% yoy), but recent increase in fixed tariffs spurred growth of fixed local revenues (8% yoy). Alexander Paraschiy: The main competition between the mobile and fixed sectors is now in the LD segment, and mobile operators with their tariff flexibility are better positioned, which means fixed LD revenues are likely to shrink further. However, we expect fixed telecom revenues to grow by 10% yoy in 2006, due to growth in local and data segments. Note that growth rates in all telecommunication sectors except local fixed have been decreasing since 2004.

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                                 8M03            8m04            8m05       8m06               

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Local Fixed                 24%              3%               1%            8%               

LD Fixed                      6%             35%             12%           -6%               

Data & Internet            81%             48%             22%          12%               

Mobile                        36%            149%            56%           40%               

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Source: State Statistics Committee, Concorde Capital calculations