OREANDA-NEWS. December 15, 2010. In the 3rd quarter 2010 the Ukraine VimpelCom Ltd. Business Unit — joint Kyivstar, which consists of the two Ukrainian telecommunications service providers — Kyivstar and Beeline-Ukraine, strengthened its leading position in the telecommunications market and demonstrated a firm dynamics of growth almost in all main activity indicators, including revenue, size of user base and amount of the traffic used by clients.

The 3.6 percent revenue growth of the joint Kyivstar over the 3rd quarter 2010 compared to the same period of the last year arises from an increase of the user base in the mobile segment by 573 thousand users (or by 2.3 percent in the 3rd quarter 2010) compared to the 3rd quarter 2009 and a growth of service consumption, resulting the ARPU growing up to 4.4%. The clients of the DJUICE youth brand appreciated the advantages of the "Bomb" rate plan, which brought about a growth of the "youth" user base by 4.6 percent or by 284 thousand people in the 3rd quarter 2010 if compared with the previous quarter. This confirms the stabilization of the base in the most price sensitive segment of the market.

The consolidated OIBDA margin reached 56.8 percent in the 3rd quarter 2010 against 50.2 percent in the same period of the last year as a result of the revenue growth and optimization of the operating costs inside the joint Kyivstar.

Notwithstanding that so far the fixed communications segment revenue of the joint Ukrainian business unit has generated just 4% of the total revenue, impressive growth is demonstrated in the key focus area — "home" Internet on the based on FTTB technology. This joint operator segment demonstrates a steady revenue and connections growth: revenue by 83.8 percent in the 3rd quarter 2010 compared to the same period of the last year; 50 thousand clients were connected to the service in the 3rd quarter 2010 and, if compared with the same period of the last year, the connection growth raised up to 143,7 thousand people or 205 percent. This takes the joint Kyivstar to the leading positions in the telecommunications market of the country in the segment of broadband fixed access on the based on FTTB technology according to the new client connection rate.

The joint Kyivstar continues its investments in the development of the network and strengthening of the high quality of the rendered services: the total volume of capital expenditures (CAPEX) reached UAH 403.3 million in the 3rd quarter 2010, which is by 6,7 percent more than in the same period of the last year, this confirms the VimpelCom Ltd. attention which focused towards to active development of the Ukrainian telecommunications market.

KEY PERFORMANCE INDICATORS IN 3Q 2010 COMPARING TO THE PREVIOUS PERIODS "UKRAINE" BUSINESS UNIT OF VIMPELCOM LTD

UKRAINE PRO-FORMA

(UAH millions)

3 Q 10

3 Q 9

3 Q 10/09

2 Q 10

3 Q 10/ 2 Q 10

Net operating revenues

3,365.4

3,247.0

3.6 %

3,071.0

9.6%

§ ARPU mobile, UAH

42.6

40.8

4.4%

39.7

7.3%

§ ARPU broadband, UAH

38.0

53.7

-29.2%

42.8

-11.2%

Adjusted OIBDA

1,913.2

1,629.0

17.4 %

1,663.0

15.0%

Adjusted OIBDA margin, %

56.8 %

50.2 %

54.2%

 

 

SG&A

873.5

949.0

— 8.0%

854.0

2.3%

§ including Sales & Marketing Expenses

167.3

223.0

— 25.0%

165.0

1.4%

§ including General & Administrative Costs

706.2

726.0

— 2.7%

689.0

2.5%

SG&A percentage

26.0%

29.2%

27.8%

 

 

Capital expenditures

403.3

378.0

6.7%

538.0

— 25.0%

UKRAINE PRO-FORMA

REVENUES (UAH millions)

3 Q 10

3 Q 9

3 Q 10/09

2 Q 10

3 Q 10/ 2 Q 10

Net operating revenues

3,365.4

3,247.0

3.6%

3,071.0

9.6%

§ Mobile

3,239.4

3,093.0

4.7%

2.928.0

10.6%

§ Fixed—line

126.0

154.0

— 18.2%

143.0

— 11.9%

1) Business segment

74.9

83.0

— 9.8%

73.0

2.6%

2) Wholesale

27.2

58.0

— 53.1%

47.0

— 42.1%

3) Residential

23.9

13.0

83.8%

23.0

3.9%

UKRAINE ACTUAL

(UAH millions)

3 Q 10

3 Q 9

3 Q 10/09

2 Q 10

3 Q 10/ 2 Q 10

Net operating revenues

3,365.4

441.7

661.9%

2,461.3

36.7%

Adjusted OIBDA Total

1,913.2

94.5

1924.6%

1,304.4

46.7%

Net income/(loss) attributable to VimpelCom Ltd.

587.3

— 296.6

n/a

236.1

148.8%

UKRAINE PRO-FORMA

OPERATING DEVELOPMENT (UAH millions)

3 Q 10

3 Q 9

3 Q 10/09

2 Q 10

3 Q 10/ 2 Q 10

Mobile operations

 

 

 

 

 

§ Subscriptions (’000)

25,057

24,484

2.3%

24,059

4.1%

§ MOU, min

433.2

330.6

31.0%

426.7

1.5%

§ ARPU mobile, UAH

42.6

40.8

4.4%

39.7

7.3%

§ ARPU mobile, USD

5.4

5.3

1.9%

5.0

8.0%

Fixed—line operations

 

 

 

 

 

§ Broadband subscriptions (’000)

213.8

70.1

205.0%

164.0

30.4%

§ Broadband ARPU, UAH

38.0

53.1

— 28.5%

42.8

— 11.2%

§ Broadband ARPU, USD

4.8

6.8

— 29.4%

5.4

— 11.1%