Russia's number three mobile phone firm, MegaFon, plans to become the country's second biggest in three years on the back of higher revenues per subscriber than its rivals, Chief Executive Officer Sergei Soldatenkov said on May 03. As the most lucrative markets of Moscow and St Petersburg are satiated, operators are looking to business in poorer regions and facing the prospects of lower average revenue per user (ARPU), a key measure of profitability for mobile phone firms. "Within three years, starting from this year, we plan to take the second biggest position by revenue first in Moscow and than in Russia thanks primarily to high ARPU levels," Soldatenkov told Reuters in an interview.

MegaFon, controlled by Nordic telecoms operator TeliaSonera, led Russia's three mobile service firms with 2004 average monthly ARPU of $12.40.

Russia's top mobile phone operator, Mobile TeleSystems (MTS), which also operates in Ukraine, Belarus and Uzbekistan, posted a monthly ARPU of $12.20 in 2004.

Vimpelcom, Russia's second biggest cell phone firm with operations in Kazakhstan, had 2004 monthly ARPU of $10.20.

Soldatenkov said that MegaFon's ARPU should not fall by more than 10 percent in 2005.

The number of MegaFon's clients doubled over a year to 15.7 million by April 1 from 7.74 million by March 31, 2004.

Copyright Reuters, 2005