Russian Mobile Content News
Weekly Newsletter, February 13-20, 2006

SMARTS negotiated with Chinese investor
In December 2005 the sixth Russian cellular operator SMARTS and Chinese ZTE Corporation had negotiations on SMARTS' 97% stake acquisition. According to undisclosed sources the parties could not agree on price. ZTE was ready to offer $600-650 mln, while SMARTS was expecting $900 mln. Earlier in 2005 SMARTS announced its intention to enter long-distance telephone services investing $1 bln in the project. (In 2005 long-distance telephone service in Russia was demonopolized.) By the end of 2005 SMARTS had 2.91 mln cellular users (1.8 mln in 2004, 61% growth rate). In 2004 SMARTS' ARPU decreased by 31% to $8.9, in 2005 by 37% to $5.7. Company's financial results: 2004 revenues - $116.9 mln, EBITDA - 38.7 mln; 2005 (nine months) revenues - $135.6, EBITDA - $54.8 mln. Over the last few years SMARTS was a tidbit for large cellular operators to acquire and penetrate the regions of SMARTS' original and dominate presence. Both MTS, VimpelCom, Megafon and Tele2 tried to take it over. But SMARTS owners have asked for a higher price. Finally the "Big Three" entered those regions by their own. Now SMARTS is a potential acquisition target for the second echelon buyers wishing to take a stake in the Russian cellular market. Over 2005 SMARTS was struggling in court battles against raiders.
Source: http://www.ComNews.ru

Jippii Russia sold to Laika Mobile Media
Business of Jippii Mobile Entertainment in Russia and Baltic countries was acquired by Laika Mobile Media Ltd as part of a management buy-out. The new owner is going to attract a group of investors to Jippii, including Small Planet Ltd., a major Laika Mobile's shareholder. Jippii was one of the first VAS providers in Russia and it was very successful in 2003-2004, among top five market leaders. Over 2005 the company was loosing its market share dropped to the seventh position (according to ADMIN Ltd.'s mobile content market report). Laika Mobile has direct connectivity to over 30 mobile operators in Russia, Estonia, Latvia and Lithuania. A significant partner in funding Laika Mobile has been Small Planet's majority shareholder Access Propeller Holdings and its majority owner Nordberg Capital. Small Planet is a Finnish mobile entertainment solution provider based in Helsinki.
Source: http://mforum.ru/sub/content/news/018608.htm

MTS receives MMS over e-mail
MTS North-West launched a "MMS postcards" service allowing users to send MMS by e-mail. That service is a part of operator's campaign to popularize MMS. To subscribe to the service a user should register by SMS indicating e-mail address which will be used for MMS posting. "MMS postcards" service is provided by MTS in partnership with a mobile content provider Mobitex. Besides, within the campaign, a MMS price is equal to outbound phone call price. In 2002 VimpelCom realized a service MMS by e-mail to phone, but soon the service has been shut down as it was generating a significant volume of SPAM.
Source: http://www.SpbIT.ru

Celltick provides content activation solution to VimpelCom
VimpelCom deployed Celltick's LiveScreen Mobile Content Discovery solution for its Chameleon branded service and ordered two mln additional licenses for LiveScreen as the service penetration is increasing. Chameleon has over 2.8 mln regular users, generating over 400,000 downloads daily. LiveScreen turns the idle screen on a subscriber's handset into a shop front for content –- from news headlines to games. The content is broadcast free of charge, with messages appearing silently when the handset is not in use. When a user sees a message of interest, they just click to open a content access menu, from where they can buy the full content. Victor Markelov, VimpelCom's Product Director, said: "We put very high priority and have great expectation from our collaboration with Celltick. Chameleon enables us to distribute mobile content rapidly and efficiently." Guy Weiss, Celltick's VP European Sales, commented: "Our LiveScreen technology has provided VimpelCom with a huge opportunity to unlock the potential of its content to engage customers and encourage their loyalty. Together we are changing the face of mobile content in Russia." Celltick is a pioneer of that "idle screen concept." Among other operators using LiveScreen are AIS in Thailand, Hutchison India and Dialog in Sri Lanka. Celltick, headquartered in London, has an R&D center in Israel and offices in China, India and Russia.
Source: http://procontent.ru/?page=news&id=798

iKS-Consulting about Ukraine's cellular market
According to iKS-Consulting, a Moscow based research company with a recently opened office in Kiev, in January 2006 a number of mobile phone users in Ukraine raised by 4.1% reaching 31.37 mln people (66.8% penetration rate). In January a number of new subscribers has decreased in two times (1.235 mln vs 3.24 mln in December 2005). Such an activity decay could be explained by the following factors: traditional after-Christmas consumer activity decline; expiration of promo action starting pre-paid packages activated in December; extremely cold weather conditions (the most efficient SIM card distribution in Ukraine is street trade); cellular market saturation that resulted in a new subscription decline rate.
Source: http://mforum.ru/news/article/018764.htm

Beeline publishing Top10 content providers
To increase transparency of the Russian mobile content market, Beeline (VimpelCom's brand) is starting publishing Top10 of mobile content providers. The list is based on the operator's revenues generated by mobile value added services. For January 2006 the Top10 is: INFON, Playfon, SouzTelecom, i-Free, Nikita Mobile, Irikom, Uniq, Avant Mobile, Svyaznoi- Zagruzka, MuzTV. Beeline's partnership programme for content providers has operated for more than three years. Currently VimpelCom is partnering with over 200 content providers. VimpelCom was the first among large Russian cellular operators offering easy scheme of connecting content providers to Beeline's network, based on the Content Provider Access technology.
Source: http://www.sf-online.ru/pressrelease.asp?oid=2395cf6d-e8fb-4f88-9f48-ca794811a128

MTS postponed Blackberry
MTS planned to launch Blackberry service at the end of 2005. But the launched is still deferred caused by patent problems at Research in Motion (RIM), the communicator developer. Meanwhile, MTS competitor Megafon is testing its own mobile e-mail, and VimpelCom is waiting for approval by the authorities to launch Blackberry. In the West all large cellular operators offering Blackberry service. For example, T-Mobile provides unlimited Internet access and 1000 minute talk for $70 a month. Blackberry communicators cost $200-500 to subscribers. According to Margarita Zobnina, a Moscow based mobile analyst, a potential audience of that service is all MTS business clients (about 5 mln subscribers). "If MTS manages to provide appropriate marketing support to the service, it could make up about 20,000 clients in a year that should bring at least $1.5 mln to the operator," said Zobnina. MTS representatives say the Blackberry service price will be at the Western levels. But if MTS substantially delays with Blackberry launch, a competitive advantage could be lost.
Source: http://mforum.ru/news/article/018716.htm

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