MTS to purchase largest Russian cell phone retailer

Having just announced quarterly net profits that have quadrupled (year-on-year) to US$460 million, the Russian operator, MTS, has announced that it plans to acquire Euroset--the country's leading cell phone retailer.

Euroset, which is privately owned and has over 5,000 outlets in CIS countries and the Baltic region, has debts of over US$800 million and has seen growth slip to just a third of what it was in 2006. However, MTS with nearly 90 million subscribers, has previously stated that it wants in three years to sell no less than 40 per cent of its contracts through a retail chain.

If the MTS deal does go ahead, it would seem very likely that Russia's other 'big two' mobile operators--Vympelkom and Megafon, would not want to have their retail channel controlled by one of their major rivals and could cancel any distribution contracts they have with Euroset.

For more on this story:
- read Russia Today and MSN Money