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. Last Updated: 07/27/2016

Vimpelcom Leads Cell Boom With Record Growth in July

Vimpelcom outpaced its cellular provider rivals for growth in July by breaking an all-time market record for the number of new contracts added.

In just 31 days, 400,000 new subscribers signed on to Vimpelcom's Beeline network, according to market tracker AC&M. These new users pushed the company's total number of clients to 4.65 million in the Moscow city and region alone.

The sector as a whole jumped by over 5 percent from June to July, with Beeline driving 50 percent of the growth.

"We now have more subscribers than MGTS, and that's something," Vimpelcom first vice president Nikolai Pryanishnikov said, referring to Moscow's fixed-line operator.

Pryanishnikov pointed to the company's new policy to do away with the expiration date for prepaid cards and two-month-old low budget tariff plan called Hit as motors for the growth.

AC&M senior consultant Alexander Shatikov said the healthy growth figures were not unusual for July, which is traditionally a peak month, "perhaps due to the start of the holiday season."

"This shows that the Moscow market still has room for growth," he said.

While Beeline added 400,000 new contracts in July, it lost 185,000 contracts, but not all of those jumped ship for a rival provider; many simply left one Beeline tariff contract for a different one. This sort of turnover, known as the churn rate, amounted to 10 percent this quarter. For example, of the 1.5 million people who have signed up for the Hit plan since its May launch, 400,000 of them were previous Beeline subscribers swapping over from another tariff plan.

Other operators also saw good results in the mobile-friendly season. MTS saw its subscriber base rise by 155,000 and No. 3 operator Megafon gained over 60,000 new clients in July, a 20 percent increase over its June subscriber base.

"Investors don't generally look at month-to-month figures. If this growth turns into a trend, then that will be viewed as good," Renaissance Capital analyst Alexander Kazbegi said.