Telecom Revenues Grew 23% yoy In 2006

Traditionally, the fastest growing segment is mobile communications (+38% yoy), however its rate of growth has declined (compared to +53% yoy in 2005 and +147% yoy in 2004). The significant increase of local call tariffs made local telecom segment revenues grow 14% yoy. The internet and data segment grew 24%. In the long-distance call segment revenues which had been fueled by increasing mobile popularity in 2004 and 2005 (due to the increase of fixed-to-mobile calls), are now losing  price competition with mobile long-distance providers following their reduction of revenues by 7% yoy.

Revenues

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USD mln           2004  2005  2006

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Local fixed        522   545   630

LD fixed         1,132 1,299 1,222

Internet & data    175   198   249

Mobile           1,775 2,841 3,967

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Total            3,603 4,883 6,068

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Source: State Statistics Committee

Alexander Paraschiy: In 2007 we forecast decreasing growth rates for the mobile segment (18% yoy), nearly the same yoy growth rate for local fixed and internet/data segment. Fierce competition for the LD segment between mobile and fixed line operators is expected to lead to further decreases in the fixed long-distance segment (-14% yoy).