PRESS: VimpelCom says followed suit of MTS by selling Euroset

MOSCOW, Aug 18 (PRIME) -- Russian mobile operator VimpelCom, working as Beeline, has explained the sale of its half in handset retailer Euroset to its partner MegaFon by a “positive example” of its rival MTS, which abandoned sales through other companies’ retail outlets in favor of its own sales, RBC reported on Friday.

VimpelCom has prepared an analytical report, saying that “the strategy of building a strong operating retail has enabled (MTS) to maintain leadership in the industry.”

The country’s four major mobile carriers – MTS, MegaFon, VimpelCom, and T2 RTK Holding, working as Tele2 – increased their SIM card sales by 2.6% in 2016 to 117 million.

The number of active SIM cards have been exceeding the number of people since long ago: now every Russian has 1.7 SIM cards on average.

“Independent dealers are the main beneficiaries of the current situation. Taking advantage of the existing stiff competition among operators of mobile connection, this retail mechanism shifts the same subscribers from one operator to the other several times per year and gets commission every time,” VimpelCom said.

In the current situation, VimpelCom decided to focus not on attracting new subscribers, “who can be taken out of nowhere”, but on servicing and keeping the existing clients and selling them additional services.

In July, MegaFon and VimpelCom, which owned Euroset on a parity basis, said that MegaFon would consolidate the retailer, while VimpelCom would buy half of Euroset’s stores for 1.25 billion rubles. The deal is expected to close in October–December.

(59.2490 rubles – U.S. $1)

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