T-Mobile expected to expand eastwards

SPECULATION IS growing over comments made yesterday by Rene Obermann, Deutsche Telekom's CEO and former head of its T-Mobile mobile network.

Mr Obermann said that the group intended to expand its overseas mobile phone operations but didn't give any clues as to where this expansion might take place. Some think that Russia is a possible target.

He was speaking as T-Mobile recorded increased revenues of 10.1 per cent in Q2 2007. Crucially this rise is being driven by an underlying increase in its ARPUs (Average Revenue Per User).

The main cause for this rise comes from T-Mobile USA where the company acquired 0.85 million new customers in Q2 2007 alone. Other strong operations were in the UK, the Netherlands and the Czech republic.

The question is - in which markets can T-Mobile increase its subscriber base? Back in June [2007], the company offered to buy France Telecom's Orange mobile phone network in the Netherlands.

This deal appears to have stalled in discussions with Orange Netherlands's council of workers.

However, T-Mobile describes itself as the market leader in Central and Eastern Europe. An obvious ploy, therefore, would be to expand its presence in that region.

Plus the network operators have a habit of copying each other. Its arch rival, Vodafone, has a very definite strategy of moving into emerging markets.

So the logical move for T-Mobile is to keep heading Eastwards and enter markets in Russia and the other former Soviet Republics.

To date the Russian market has been fraught with problems but the situation has improved recently.

the Alfa Group and Ipoc have recently agreed to settle their differences over a 25.1 per cent stake in Russia's Number Three mobile network operator, Megafon.

So it must just be possible to safely buy Megafon now.

One of Megafon's main power bases is Volgograd. A city formerly known as Stalingrad, of course. µ

L'INQ
Megafon