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Ramzan Kadyrov Wins Tariff War with MegaFon

MegaFon subsidiary, Mobicom-Kavkaz, trimmed the tariff rates two fold yesterday. The company renders cellular services in Chechnya and was forced to cut down prices by Chechen authorities. MegaFon won’t suffer hefty losses as a result, the experts forecast, but this move of Chechen officials is bound to delay the entrance of other cellular operators to the market of Chechnya.
Mobicom-Kavkaz trimmed its rates two fold on average yesterday. It was “the scheduled action set forth in the 2006 marketing plan of the company,” spokesmen of Mobicom-Kavkaz said.

“The decision to reduce the cost of services ahead of schedule was made in the wake of address of authorities of Chechen Republic and because of the standing announced by communications administration. We hope for cooperation of Chechen Republic when overcoming the possible technical problems that may arise due to the surge in the traffic volume,” Moscow office of MegaFon commented on the market initiative of its North Caucasus branch.

The tariff rates reduction was the initiative and achievement of Chechen government, sources with the latter emphasized. “During negotiations that lasted more than two weeks, we made clear they wouldn’t profiteer in our difficulties,” said Muslim Khuchiev, who is the 1st deputy to the chief of Chechen government’s staff. “In the republic that practically has no stationary phones, the demand for mobile communication is particularly high.”

Mobicom-Kavkaz (around 300,000 subscribers) is still the only cellular company working in Chechnya, even though MTS and VimpelCom are licensed to the effect. The only thing they need, apart from the will of course, is the sanction of special services for commercial operation there.

Date: Apr. 05, 2006
Source: Kommersant

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