VimpelCom URS Unit Launches Beeline Brand In Ukraine
MOSCOW -(Dow Jones)- Russia's second-largest mobile phone operator Vimpel Communications (VIP) said Tuesday that its URS unit has launched its Beeline brand in Ukraine.
URS is the fourth-largest operator in Ukraine with a market share significantly smaller than that of leaders Telenor-owned Kyivstar, a unit of Mobile TeleSystems UMC and Turkcell, owned by Astelit.
The launch of the brand, coupled with a limited offer of lower prices, is intended to quickly increase the company's share of this growing market.
VimpelCom acquired URS in the middle of last year for $231 million despite opposition from Norway's Telenor, holder of 27% in VimpelCom, which saw it as too expensive.
Telenor is currently disputing the legality of the acquisition.
Meanwhile, Telenor and Russia's Alfa Group, which owns 33% in VimpelCom, started talks on an alternative way for VimpelCom to enter the Ukraine by buying Kyivstar. They are currently discussing terms and the price, which is likely to be around $5 billion in cash or a cash and equity deal.
Telenor owns 56% in Kyivstar, while Alfa holds 44%.
Commenting on the launch of the Beeline brand in the Ukraine, Telenor's Executive Vice President and Head of Central and Eastern Europe Jan Edvard Thygesen said the company was "surprised that VimpelCom is spending so much money and effort on this launch when there are serious discussions going on between the major shareholders and the company regarding this proposal, as well as litigation seeking to undo the transaction involving URS."
"Telenor believes it would be most beneficial to launch (the brand) in Ukraine... through the acquisition of Kyivstar," he said, adding that he hopes that the Beeline brand will not suffer as a result of its launch on the URS network, which is inferior to Kyivstar's nationwide network.
VimpelCom's Chief Executive Officer Alexander Izosimov has reportedly told the Norwegian press he is taking Telenor's concerns very seriously.
Company Web site:
http://www.vimpelcom.com
-By Anna Ivanova-Galitsina, Dow Jones Newswires;