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. Last Updated: 07/27/2016

Top 3 Mobile Firms Get 3G Licenses

bloombergA display of 3G devices. Experts believe the platform will help boost the country's saturated mobile phone market.
The country's three major mobile operators, MegaFon, Mobile TeleSystems and VimpelCom, were granted licenses to provide third-generation mobile services Friday in a contest some participants claimed was fraught with irregularities.

Experts believe the new technology will decongest Russia's saturated market for GSM mobile phones, while offering users an array of new services, such as video-conferencing and mobile television.

MTS chief executive Leonid Melamed said Friday: "The new technology will make communicating more fun and productive for our customers," adding that the 3G license will allow his company to introduce new and useful products and services to its customers.

3G mobile technology gives operators the ability to transfer voice and other data, thereby allowing consumers to use services such as e-mail, instant messaging and video-telephony on their cell phones.

Melamed said the 3G networks in Russia would complement the existing GSM network, adding that his company will offer 3G services in the largest cities in Russia beginning from the second half of this year.

VimpelCom CEO Alexander Izosimov also expressed satisfaction Friday at what he called "a well-deserved reward" for the buoyant performance of his company in the country's mobile market.

Speaking to analysts after publication of VimpelCom's annual results last week, Izosimov said the company planned to invest up to $350 million on a 3G network by the end of 2008.

Mobile operator MegaFon declined to comment Friday, saying only that its "future plans must first be approved by shareholders."

The Federal Communications Agency opened the way for bid applications in December, stipulating criteria on infrastructure capacity and the financial means required to clear allocated frequencies. Each applicant also had to pay a 2.6 million ruble ($100,000) fee. The operators named Friday are expected to have commercial operations up and running by 2009.

The conduct of the contest has left some of the losing participants seeking redress, however.

The tender committee's decision drew the ire of two unsuccussful contenders -- SMARTS and Network Telecommunications Company -- which were dropped after the first stage in early April.

SMARTS general director Andrei Girev said Friday that his company had joined forces with Network Telecommunications Company to file suit against the Federal Communications Agency for placing misleading information about them on its official web site.

Girev said the outcome of the competition was predetermined, adding that his company was now forming a coalition of mobile operators to force the agency to issue a fourth 3G license.

"Countrywide 3G development will suffer if only Moscow-based federal operators are awarded 3G licenses," Girev said.

Deutsche UFG analyst Anastasia Obukhova agreed, saying that even if 3G implementation were hitch-free, operators would mainly concentrate on Moscow this year.