RUSSIA AND CENTRAL ASIA Q1 2009 REGIONAL ROUNDUP

Cellular-News
1st July 2009

The last twelve months has seen a total of 41.8m new customers in
the Russia and Central Asia region. Of these, 6.86m came in the final
period, the first three months of 2009. This was a marked reduction on
earlier growth rates, with almost every market seeing a lower level
of new customers than in the prior quarter. Russia was particularly
badly affected and unusually, the majority of net adds came from the
other countries

This is only the second time this has happened, the first being in
Q1 07. However, the two quarters are not directly comparable – in the
first, when Russia added just 1.76m customers, the overall total was
materially depressed by Vimpelcom’s decision to switch from reporting
registered customers to active. This time, there was no such effect
and the numbers are a straightforward reflection of demand in the
region’s largest market. With penetration at over 135% (and overall
teledensity some 30ppts above that) it would seem that in future, a
majority of the region’s growth will come from the smaller countries –
at least until such time as the market for 3G datacards develops

As noted above, Russia is not the only market to experience a slower
rate of growth. Kazakhstan, the region’s second largest market (with
15.4m connections) added 414k new customers, but this was nearly 0.75m
fewer than in Q4. Uzbekistan, the third largest market, was similar:
it added an impressive 869k new connections, but that falls well short
of the 1.79m seen in Q4. The same pattern was repeated, to a greater
or lesser extent, in Kyrgyzstan, Tajikistan, Georgia, Armenia and
the two fragmentary markets of Abkhazia and Nagorno-Karabakh. Only
three markets produced greater gains in Q1 than in Q4 – Azerbaijan,
Turkmenistan and Afghanistan.

The first two saw net gains of 505k and 207k respectively, decent
improvements on Q4’s numbers, but it is Afghanistan that impresses
most. It added 1.33m new customers in Q1, a new record and the second
million-plus quarter in succession. It seems that demand for mobile
services can flourish irrespective of circumstance.