MTS

Location:

Regional

Project number:

36894

Business sector:

Information and Communication Technologies

Notice type:

Private

Environmental category:

C

Target board date:

04 Apr 2006

Status:

Completed

PSD disclosed:

29 Mar 2006

Project Description

The proposed project is to finance further expansion of Mobile TeleSystems OJSC (“MTS” or the Company) into the Russian regions and the CIS countries, financial restructuring and technological upgrade of its subsidiaries, including recently acquired subsidiaries, and supporting competition in the Russian regions and the CIS countries.

Transition Impact

By participating in the project, the Bank will be supporting

(i) further expansion of MTS into the regions

(ii) financial restructuring and technological upgrade of its subsidiaries, including the ones recently acquired and

(iii) supporting greater competition in these areas.

Competition between MTS, VimpelCom and MegaFon has stimulated the rapid growth of the mobile sector in Russia and has provided both individuals and enterprises with a choice of operator. Competition has led to the introduction of new products and more importantly, through the reduction of prices, it has brought mobile telephony within the reach of a growing number of people in urban and rural areas. Additionally, by fostering the substitution of fixed lines by mobile, MTS is also a competitor of the local state controlled fixed-line incumbent – Svyazinvest. The principal transition impact of the project will come from the increase in the quality and geographical reach of the mobile network in the areas, where penetration to-date has been low, thus stimulating economic activity in areas that would otherwise have been unable to participate in the country’s growth.

The Client

MTS, the leading Russian GSM service provider, with over 60 million subscribers in Russia and the CIS countries. It is 53% owned by JSFC Sistema (“Sistema”), the largest private sector consumer services company in Russia and the CIS and 47% is in free float on the New York Stock Exchange.

EBRD Finance

USD 250 million 8-year facility.

Project Cost

USD 1.58 billion.

Environmental Impact

The project was screened C1.

The Company is an existing client and the most recent annual environmental report (March 2006) in relation to the preceding project confirmed the Company’s compliance with relevant environmental, heath and safety requirements. The Company will be required to continue to comply with national and EU environmental, health, safety and labour requirements in respective countries as well as to submit annual environmental reports to the Bank.

Technical Cooperation

None.

Company Contact

Galina Istratova
Mobile TeleSystems OJSC

Tel: +7 495 912 3220
Fax: +7 495 911 6588

E-mail: gyi@mts.ru

 

Business opportunities

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