Apple iPhone 3GS to Hit Shelves in March

The country's top three mobile operators have agreed with Apple on terms to begin offering the iPhone 3GS in Russia next month, though sales of the device are expected to be modest.

VimpelCom and Mobile TeleSystems both said they would start selling the iPhone 3GS soon. VimpelCom said sales would start "within a month at the latest." MTS spokeswoman Irina Osadchaya would not disclose a start date.

But several sources in the big three, which also includes MegaFon, said they would all begin sales of the new model by the end of March and at a single price recommended by Apple. VimpelCom's online store has already posted advertisements to order the phone in advance, offering the 16-gigabyte model for 29,990 rubles ($1,000) and the 32GB version for 34,990.

Legal sales of the original iPhone began in Russia in October 2008, or 16 months behind the U.S. market. The iPhone 3GS went on sale in the United States and eight other countries on June 19, 2009, and Apple had promised to begin sales in August.

The iPhone 3GS's debut in Russia was delayed by more than half a year because of protracted talks between the operators and Apple. The Russian companies were able to renegotiate the initial terms of their iPhone contracts, which would have seen MTS buy about 1.3 million units from 2008 to 2011; VimpelCom would have purchased 1.5 million phones by October 2010; and MegaFon would have taken 1 million in the same period.

The contracts include the purchase of iPhone 3GS phones, sources in the three mobile operators said.

But operators got off to a rough start with the first iPhones. VimpelCom said that from October through December 2008 it purchased just 12 percent of its planned volumes, while in the first quarter of 2009 it did not buy a single iPhone.

MTS and MegaFon also conceded that they were selling far fewer iPhones than they had planned. The sources from the big three said the purchase price had not changed much for the new phones and would be about 450 euros ($610). The volumes, however, fell considerably, with the big three combined buying no more than 100,000 units initially.

The sources also said they were hurting because Apple had decided not to let them advertise on television anymore. Now the agency Optimum Media OMD Group will buy TV advertising spots for the iPhone. One of the sources said Apple did not like how the televised ads for the big three were all running at around the same time. He said he was worried that the operators would have to increase their expenses, since they had already bought up airtime at 50 percent discounts.

A source at another operator said the companies' expenses would increase because they had purchased some of their advertising spots in advance.

A spokesperson for Optimum Media OMD was unable to comment on the situation Tuesday. Apple manager Bethan Lloyd said only that the iPhone 3GS would appear in Russia "in the coming months."

The new model will sell well for the first few days, but then sales will fall to a maximum of 100 units per day across the entire country, said Alexander Malis, president of Yevroset, the country's largest handset retailer. The company is 49.9 percent owned by VimpelCom.

Malis said the original iPhone is selling at a rate of 30 to 50 units per day.

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