OREANDA-NEWS. December 1, 2007. Vadim Shulman, a partner of Igor Kolomoiskiy in the coke business, increases his presence in telecom sector. Telesystems of Ukraine, controlled by him, which provides 3G mobile communication services under PEOPLEnet brand, is finalizing the acquisition of the Dnepropetrovsk-based CDMA-operator – CST-Invest (NewTone TM), owned by Dmitriy Mishalov, one more influential partner of Mr Kolomoiskiy, UFC-Capital reports. According to Tsviki Pakula, chief executive of Telesystems of Ukraine, the deal on CST-Invest acquisition will be finalized in the Q1 of 2008: “The company will be fully integrated into Telesystems of Ukraine. We shall provide service to our clients under the common brand – PEOPLEnet. After the merger the subscribers of PEOPLEnet will have two numbers in one mobile communication device – direct and mobile number with “092” code.

Dmitry Mishalov is famous for his interests in construction business (Master IPG), as well as by the fact that he together with Vadim Shulman, Mikhail Keitelgisser and Mikhail Tulchinskiy controlled the operator of the coke business of Tekhnologia, the Dnepropetrovsk-based financial and industrial group.

It is interesting that Mr Shulman has been carrying out the negotiations on purchase of telecom business owned by Dmitriy Mishalov for almost a year. The information that Telesystems of Ukraine will buy CST-Invest became public for the first time in January 2007. At that time, Mr Mishalov estimated his operator at $10 mn, but few months later, the National Communications Regulatory Committee issued to the company a license for provision of CDMA mobile communication services in 10 regions of Ukraine, which increased several times the company capitalization. The negotiations on sale of the business were suspended. Now, they are close to their logical end.

In fact, this license for CDMA technology use for mobile communication became the fifth one. The first one, back in 1997, was issued to Telesystems of Ukraine for IS-95 (cdmaOne) standard. On June 8, 2007, it was prolonged till January 1, 2016, for CDMA2000 standard; the company obtained its network code – “092” and has 1.25 MHz frequency bands allocated in all regions of Ukraine. The second license – on December 1, 2005, -- was issued to Ukrtelecom with the network code – “091”. Although it is about another standard — UMTS/WCDMA, working in 1.7–2.1 GHz band, it uses the similar technology. In early July, the third mobile CDMA-license (for 18 regions) was issued to International Telecommunications LLC (Intertelecom, network code – “094”, CDMA2000 standard, provides services to 30 thousand of subscribers; controlled by Boris Akulov, a businessman from Odessa). The fourth license at the end of July was issued to UMC for IMT-MC-450 standard or CDMA-450, working in 450 MHz band. The company explained, however, that it is going to use it only for data transmission services. Now, the license was also issued to CST-Invest, in fact to the first in Ukraine and second in Europe company that launched the network operating in transitional to 3G standard – CDMA2000 1x.

Acquisition of CST-Invest will enable Vadim Shulman not only to increase the capitalization of Telesystems of Ukraine, but also to increase the company’s subscribers base and ARPU (average return per unit). Presently, according to Tsviki Pakula, chief executive of Telesystems of Ukraine, the ARPU is slightly exceeding $10. Usually, the income per subscriber of the CDMA-operator exceeds $20. According to iKS-Consulting analytical agency, the subscribers base of PEOPLEnet includes 52.5 thousand of subscribers, of CST-Invest – 20.57 thousand.