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MTS, Vimpelcom to Build Joint 4G Network

Mobile phone operators MTS and Vimpelcom have signed a memorandum to build joint 4G infrastructure, Kommersant reported on Monday, citing a source in one of the companies.

According to the agreement, the two companies will lay 4,500 kilometers of fibre optic lines by the end of 2012 and share existing communications infrastructure.

"The benefits [of the agreement] are obvious: The network will be built faster, costs will be reduced, and the range and quality of services will be improved," said MTS spokeswoman Valeriya Kuzmenko.

MTS and Vimpelcom, which control 31.6 percent and 24.9 percent of the mobile phone market respectively, have invested a combined $20 billion in infrastructure and are poised to invest another $2 billion in 4G networks, said Viktor Klimovich, an analyst with VTB Capital.

The companies could save several hundred million dollars as a result of the agreement, he said.

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