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Moscow (pte044/14.03.2005/16:15) - Russia's third-largest mobile phone operator MegaFon http://www.megafon.ru has announced that it will rent wireless network from the Russian far-east incumbent Dalsvyaz to speed up and cut costs of expansion in the region. As the company reports in a press release on its website, this will be the first time one of the "big three" (TeleSystems, Vimpel Communications and MegaFon) becomes a mobile virtual network operator, as previously they only built their networks themselves.
"We are renting channels in the Kamchatka peninsula and Magadan region (both on the Pacific coast), where the population is very scarce and the weather conditions are harsh. If we had chosen to build our own network, we would have had to invest a lot and it would never pay back," said a spokesman for MegaFon in the Russian far east. He added that the long winters are so cold that they don't allow cement, which holds base stations, to solidify. This leaves only four months from May to September to conduct any construction. However, even the summer months are characterised by gale force winds and storms. As far as timing, it will save MegaFon time of construction and three to six months of regulatory regulations, the spokesman added. "The agreement is equally interesting to Dalsvyaz, as they already have network, which is only used at a fraction of capacity as the population is so thin," he said.
According to a Dalsvyaz spokeswoman, her company is interested in the agreement as it helps to cut costs on national roaming via MegaFon's network. Another reason for Dalsvyaz to rent out network to Megafon is that it will provide it with a source of revenue as its mobile operations struggle to compete with the "big three". She didn't exclude the possibility of working with other operators as well. However, both MTS and VimpelCom have said that they aren't yet considering the possibility. MTS said that its network already covers most of the Russian far east, while VimpelCom has licenses to cover only a small part of the region, but said that for the time being, it plans to pursue its old growth strategy - applying for licenses or via acquisition of local operators and not by renting other operators' channels.
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