Third GSM Operator Unlikely To Change Moscow Sector

The arrival of the third cellular GSM-standard phone operator in Moscow is unlikely to prompt any price wars or major changes in the market, which is moving close to a saturation point after a period of extensive growth, experts say. Sonic Duo, which is part of the nationwide MegaFon network, announced the launch of operations in the capital Wednesday. "Today, the duopoly of the existing operators MTS and VimpelCom ended, making room for a better competitive environment," said Leonid Rozhetskin, president of LV Finance, the parent company of CT-Mobile, which owns 65 percent of Sonic Duo, with the rest controlled by Finland's Sonera. According to Rozhetskin, $100 million has already been invested in the construction of the Sonic Duo network in Moscow and the oblast. Currently, coverage is limited to the areas within the Moscow Ring Road and around several major highways, but the company said it expects to develop its network in the surrounding oblast. Sonic Duo hopes to grab 30,000 subscribers by the end of this year and about 10 percent of the Moscow market by the end of next year. That should rise to 20 percent by the end of 2004, according to Alexei Nichiporenko, acting general director of Sonic Duo. He added that the company expects to account for about one-third of all new subscribers in Moscow and the oblast next year. Experts say that while attracting 30,000 subscribers by the end of the year is feasible, the longer-term forecasts may be a bit over-optimistic. "Sonic Duo's coverage is still inferior to that of the existing operators," said Alexei Yakovitsky, an analyst at the United Financial Group in Moscow. "MegaFon, unlike Sonic Duo, which has been around for more than a year, is still a little-known brand. The company is unlikely to attract as many new clients as each of the two existing GSM operators next year," Russia Journal quoted him as saying.