VimpelCom's Chairman Is Upbeat on Mobile Market

OSLO -- VimpelCom expects to keep its growth momentum in Russia, where it is the No. 2 mobile phone firm, even though the market itself is quickly maturing, its chairman said Thursday.

"The growth still seems to be there, but we are approaching a saturation point," Jo Lunder said. "As it looks now, VimpelCom is growing very well, and I have no reason to believe that should not continue."

He said one of the main challenges for VimpelCom and rival mobile operators was to shift focus from winning customers and market share to efficiency in operations and building brands and services.

Lunder, who is also the new chief executive of Norwegian information technology firm Ementor, said the Russian market remained the primary market for VimpelCom, but it was also seeking opportunities elsewhere.

Lunder also said that several former Soviet republics showed good development, and that VimpelCom was considering entering those markets.

The firm started operations in Kazakhstan in September last year.

"Besides there, the board will consider investments outside Russia on a case-to-case basis," said Lunder.

VimpelCom's biggest shareholders are Alfa Group, with 32.9 percent of the voting stock, and Norway's Telenor, which has a 26.6 percent stake.

In December, VimpelCom faced hefty tax claims that sent shockwaves across the market and fears of a Yukos-style state intervention, but those claims were later sharply reduced by the authorities.

"The tax case was solved in a very satisfactory way," Lunder said. He said investors had to be aware that business in a country like Russia, where returns are high, also involves more risk.