VimpelCom stops overseas expansion until crisis ends

VimpelCom's CEO Alexander Izosimov has told Mobile Business Briefing that the operator is unlikely to expand its international footprint in the next year due to the global economic crisis, a strategy that mirrors recent comments from the heads of France Telecom (Orange) and Deutsche Telekom (T-Mobile).

'We won't be looking at M&A and expansion moves until the dust settles,' the head of Russia's second-largest operator (in terms of subscribers) was quoted saying. 'In this financial turmoil it would be very difficult to execute as it is so difficult to correctly value deals. This year we will focus more on efficiency in our existing markets rather than growth.'

Last July, the operator announced the acquisition of a 90% stake in Sotelco for US$28 million, a company that holds a GSM 900/1800 license and related frequencies in Cambodia. VimpelCom also entered the Vietnamese market earlier that month after taking a 40% stake in GTEL Mobile, a mobile joint venture with Vietnam's state-owned Global Telecommunications Corporation (GTEL).

Izosimov stressed that the company remains open to future deals once the global economy recovers, targeting Asia, the Middle East and Africa as potentially attractive investments.

Domestically, VimpelCom has expanded its portfolio with the acquisition last June of Corbina Telecom, an alternative service provider operating in 25 regions in Russia - including Moscow - which owns a fibre optic network. 'We have stopped being a pure mobile player; this will deliver another source of growth for us,' Izosimov said.

Mobile broadband continues to be a main focus for the operator though; Izosimov said VimpelCom has launched HSPA networks in more than 30 Russian cities. The CEO also said that faster technologies such as HSPA+ and LTE will be considered in future ,but did not commit to deployment.