Vimpelcom Announces 23% Grouth In Revenues, Confirms Wind Bid

Russia-based telecoms group Vimpelcom has announced revenues of USD2.64 billion for the three months ended 30 June 2010. This figure represents an increase of 23.1% from USD2.15 billion one year earlier. However, net income for the same period slumped from USD700.5 million to USD334.7 million, a drop of 52.2%.

The group’s domestic unit saw revenues increase 4.4% to RUB61.74 billion, of which RUB51.83 billion (USD2.01 billion) was derived from Vimpelcom’s mobile unit, a rise of 5.3% year-on-year.

Meanwhile, the group’s fixed line operations generated RUB9.91 billion, and increase of 0.1% from 2Q09. In operational terms Vimpelcom recorded 50.91 million mobile subscribers as at 30 June, a rise of 1.9% year-on-year. Of these, 1.3 million used the company’s Russian 3G network, up 70.4% from 763,000 in 2Q09. Vimpelcom saw fixed broadband subscriber figures increase 33.8%, from 896,000 to 1.2 million as at end-June.

Alexander Izosimov, Vimpelcom’s CEO commented: ‘Our second quarter results show positive dynamics, reflecting economic recovery in major markets and seasonal trends. Revenues increased substantially as a result of both Kyivstar consolidation [in Ukraine] and strong organic growth across all key segments of our business. The mobile segment in Russia delivered its highest ever quarterly rouble revenues. Quarterly revenue and margin dynamics in Ukraine improved substantially on a like-for-like basis. In Kazakhstan, our largest market in the CIS segment, the strong quarterly results also reflect the macroeconomic recovery.’

Isozimov also confirmed reports that Vimpelcom is in talks with Egyptian businessman Naguib Sawiris' holding vehicle Weather Investments to buy a majority stake in Egypt-based telecoms group Orascom as well as Italian full-service operator Wind. The CEO said, 'We are in talks with them as well as others,' without giving further details.

Orascom Confirms Talks With Vimpelcom Are On

Orascom Telecom's Executive Chairman Naguib Sawiris has confirmed previous press reports that his holding company Weather Investments is in talks with Russia’s Vimpelcom over possible merger plans involving assets including Weather’s controlling stakes in the Egypt-based Orascom group and Italy’s Wind. Whilst talking to press on a visit to Orascom’s Canadian subsidiary Globalive Wireless (Wind Mobile), the Egyptian entrepreneur also confirmed that he was open to discussions with any potential strategic international partner for Weather/Orascom, Canadian paper the Global & Mail reported. Sawiris said: ‘We are not only talking to [Vimpelcom], we are talking to anybody ... We have two things on our agenda right now – solving the Algerian issue [where the local government wants to block attempts to sell Orascom’s mobile unit Djezzy] and, second, finding a good partner for the group.’ He also declared it was possible that Wind Mobile could eventually acquire other Canadian cellular start-ups such as Mobilicity and Public Mobile.

Vimpelcom 'About to Buy' Weather

Reuters reports that Russia’s Vimpelcom and Naguib Sawiris are ‘close’ to signing a term sheet for the sale of the Egyptian tycoon’s holding company Weather Investments, which owns 50%-plus-one-share of Egyptian-based mobile group Orascom Telecom and 100% of Italian telco Wind Telecomunicazioni as well as controlling Greek operator Wind Hellas.

The report, citing Italian newspaper Il Sole 24 Ore, said that Sawiris is looking at selling Weather to Vimpelcom with help from Lazard, Deutsche Bank and Citigroup. Vimpelcom declined to comment on the Il Sole 24 Ore report today whilst Orascom was not immediately available for comment.

Russian Cellco in Orascom Bid

Reuters, quoting Russian newspaper Kommersant, reports that Russian cellco Vimpelcom is considering a potential deal to purchase 51% of Egyptian cellular group Orascom Telecom as well as take control of Italian full-service telco Wind Telecomunicazioni by buying out the two companies’ mutual holding company Weather Investments.

Weather Investments is controlled by Egyptian tycoon Naguib Sawiris.

The Kommersant report, which did not name its sources, said Vimpelcom could pay for the deal with cash and shares, with Sawiris and his partners getting approximately 20%-23% of voting rights in Vimpelcom, which currently has a market value of USD22.6 billion.

The potential deal, worth an estimated USD6.5 billion without debt, would reduce the stakes of Russia’s Alfa Group and Norway's Telenor in Vimpelcom to around 35% and 27% respectively, from 44.65% and 36.03% at present, following the Russian firm’s merger earlier in the year with Ukraine’s Kyivstar. Elsewhere, Wind’s Greek sister telco Wind Hellas is currently receiving offers from potential new investors as it aims to restructure its capital.

Orascom In Bid To Acquire Polish, Serbian Operators

Orascom Telecom Holding chairman Naguib Sawiris has told Egyptian state-owned newspaper, al-Ahram that his company is looking at acquiring Polish mobile phone operator Polkomtel and Serbia's Telekom Srbija. Sawiris did not reveal details of either acquisition.

Polkomtel is currently 21.85% owned by Poland's largest power group, PGE, while oil refiner PKN Orlen and copper miner KGHM Polska Miedz each hold 24.39%. Polish state-owned coalminer Weglokoks has 5%, while Vodafone Group holds 24.39% of shares. Telekom Srbija meanwhile is 80% state-owned, but in March the government announced plans to sell half its stake. Greece's Hellenic Telecommunications Organisation (OTE) owns the remainder.

Orascom Telecom itself is majority owned by Rome-based Weather Investments. Sawiris and his family own the majority of Weather, which owns 51% of Orascom Telecom Holding, plus Italian cellco Wind Telecomunicazioni and Greek telco Wind Hellas.