OREANDA-NEWS. On 09 July 2009 was announced, that OJSC “MegaFon”, the first pan-Russian mobile operator, had completed its reorganization in the form of Merger with regional subsidiaries.

OJSC “MegaFon” has completed its Merger with regional subsidiaries. On July 01, 2009, entries were made to the Uniform State Register for Legal Entities on termination of activities of CJSC “Sonic Duo”, CJSC “Mobicom-Kavkaz”, CJSC :Mobicom-Center”, OJSC “MCS – Povolzhie”, CJSC “Ural GSM”, CJSC “Mobicom-Novosibirsk”, CJSC “Mobicom-Khabarovsk”.

 Starting from July 01, 2009, mobile communications services are rendered by the Stolichny, Kavkaz, Central, Povolzhie, Ural, Siberia and Far East Branches of OJSC “MegaFon”. The North-West Branch of OJSC “MegaFon” has been operating since 2002.

“In the market perception MegaFon has been a single company for quite a long time with uniform governance standards, strong uniform brand and corporate culture. Now MegaFon has become a single company from the legal standpoint as well. We believe that our approach to managing the business is an important competitive edge; therefore, I would  highlight our well-balanced system of authorities distribution between the center, the branches, and regional divisions that has been functioning successfully for many years already. After the Merger we plan to maintain and improve this approach to making strategic and operational decisions in the company. We are setting ambitious targets, and the merger is yet another step on our way to making them come true, - says Sergey Soldatenkov, MegaFon’s Chief Executive Officer.

The resolution on the Merger was made by MegaFon’s shareholders at the Extraordinary General Shareholders Meeting on December 29, 2009.

“During these six months we have done really enormous work which involved all functions and departments both at the HQ in Moscow and in all regions. All actions within the Merger targeted at ensuring the efficiency of operations on the united company starting from the moment of excluding the subsidiaries from  the Uniform State Register for Legal Entities were performed in due time, and were all successfully completed”, - says Anna Goriainova, General Counsel/Corporate Secretary.

The Merger of the subsidiaries will increase the value of the united company, and will become an additional driving force for its further development. Yet another effect from the Merger will be the improved management efficiency, as well as operational and financial benefits of cost cutting due to centralization of certain processes. Moreover, the Merger of the subsidiaries into OJSC “MegaFon” will accelerate implementation of projects on 3G as well as long-distance domestic and long-distance-international networks development on the entire territory of the Russian Federation, which will also enable the company to offer additional possibilities in terms of communications services to large federal customers with developed branch structures.

Within the Merger a lot was done in the field of corporate development. Former General Directors of subsidiaries which have now terminated their activates were appointed to the positions of the Directors of the newly established Branches of OJSC “MegaFon”. The heads of the Branches were elected to the Management Board of MegaFon on June 02, 2009. Apart from that, each of the Directors of the Branches became Deputy CEO of MegaFon for a corresponding region on June 01, 2009.

A new structure of governance levels has been built in the united company. Regional divisions have been established on the Branches operating in one or several regions of the RF (MegaFon totals 54 regional divisions). Within certain major regional divisions smaller separately operating units have been established in republics, regions, and cities.

During the Merger the Company has made uniform Conditions for Rendering Communications Services which are a basic document describing rendering of services to customers, as well as agreements with dealers, content-providers, payment systems which render package services to MegaFon customers.