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. Last Updated: 07/27/2016

Svyaznoi Offers Extra Gimmicks

Svyaznoi, the country's second-biggest mobile handsets retailer, rolled out a line of customized phones on Tuesday offering easier access to games, music and other so-called value-added services in an effort to gain an edge over its rivals in a contracting market.

"There is a tendency toward stagnation, a drop in the market," Svyaznoi commercial director Sergei Rumyantsev told reporters.

Surging prices have caused total handset sales to fall 20 percent in the first six months of 2006 over the same period last year, to 13.51 million units, according to an estimate by Yevroset, the country's leading handsets retailer.

The customized phones, which allow simpler, one-button access to over 500 games, music tunes and other value-added services will encourage greater customer loyalty, Rumyantsev said.

The move toward personalized phones is good for Svyaznoi's image, market watchers said, while mobile operators, producers of mobile content and handsets manufacturers are also likely to benefit, particularly if other retailers follow suit. Svyaznoi, whose first-quarter revenue reached $714.1 million, has signed deals with vendors of Siemens, Motorola, Alcatel and Sagem handsets to customize models to be sold at the same price as standard phones. Yevroset also is developing a line of customized phones, spokeswoman Tatyana Gulyayeva said, without elaborating.

Mobile operators are counting on greater usage of value-added services to boost revenue, as there are increasingly fewer new subscribers in the market. Mobile penetration reached 95 percent in May, according to AC&M Consulting.

Nevertheless, value-added services accounted for just 12 percent of mobile operators' $10.4 billion in profit last year because many consumers found using the services too complicated, according to J'son & Partners consultancy.

"We want to make purchasing content as simple as making phone calls," said Roman Vasilyan, head of Svyaznoi's mobile content arm. Up to 25 percent of Svyaznoi's phones will be customized by year's end. Svyaznoi hopes to sell about 500,000 such handsets by next year.