"Vympelcom" ionizes retail. The operator is ready to buy all Ion network

"Vympelcom" ionizes retail. The operator is ready to buy all Ion network
The Vympelcom mobile network operator plans new investments into a retail


The Vympelcom mobile network operator which retail network last year trebled, plans new investments into a retail. In three years the company will acquire the right for purchase of all network of salons "The digital center "Ion" for 80-140 mln. dollars. Earlier the operator discussed purchase of a controlling stake of the company.

Conditions of an option for purchase of retail network "Ion" are published in the reporting of VimpelCom Ltd under a form 20-F for 2013. Depending on financial performance of the retailer following the results of 2016, and also "at satisfaction of certain conditions" "Vympelcom" will pay for 100% of retail network of 80 mln. dollars to 140 mln. dollars, is told in the report. Implementation of the option contract signed in December, 2013 will begin since January, 2017. In the press service of "Vympelcom" did not begin to specify, what animators will be applied at the retailer's assessment.

About that "Vympelcom" can get "Ion", sources of "Kommersant" reported in September, 2013. In December "Vympelcom" and "Ion" declared strategic partnership within which the retailer decided to pass to a brand of "Know-how". Now from hundred salons of "Ion" in Moscow, Moscow area, the Ryazan and Tverskaya areas 54 salons are translated under a brand of "Know-how". In these salons visitors can not only acquire digital equipment, but also adjust it. Thus in a separate monobranded zone of "Beeline" contracts of the operator are on sale. According to the contract, in 2014 only in Moscow hundred points of "Know-how", by the end of 2015 – 150 points will work. At the time of the announcement of partnership of the party did not discuss sale of 100% of "Ion". As the commercial director of "Ion" Alexander Bolotov told then, "Vympelcom" was interested in purchase of a controlling stake. On May 16 he refused to discuss the transaction.

The group of companies "The digital center "Ion" includes some legal entities, basic of which – JSC Mobilend and JSC Mobilnye resheniya. The owner of the first, according to Kartoteka.ru, Andrey Bachurin, the second – Alexander Yurov is. The brand "Ion" is registered on JSC Mobilend. Following the results of 2012 the revenue of "Mobilend" grew by 31,5%, to 981 million rubles, gross profit – for 31,7%, to 861,5 million rubles, the net profit was reduced by 48,6%, to 579 thousand rubles.

The digital center "Ion" enters in top-15 the largest retailers in Russia; in 2013 its revenue made 9-10 billion rubles, the general director of Infoline-analitika agency Mikhail Burmistrov counted. According to the general director of the retailer of Enter Sergey Rumyantsev, the cost of "Ion" "is closer to the lower bound of the declared range VimpelCom".

Recently "Vympelcom" increases investments into own retail. As the operator in the reporting for the first quarter 2014 reported, its monobranded network grew three times: now across all Russia over 1,2 thousand points of "Beeline" are. 39% of sales of contracts of "Vympelcom" are the share of these salons. The contract on development of a monobrand of "Vympelcom" in February, 2011 is signed with one retailer – "Euroset". Under this agreement in 2013 "Euroset" received 16,4 mln. dollars from "Vympelcom", is reported in the reporting of VimpelCom Ltd. Meanwhile the executive vice-president of "Vympelcom" Alexander Popovsky in April declared to "Interfax" that the operator "it does not intend to increase number of shops to mad figures".

Besides own retail "Vympelcom" possesses 50% of "Euroset", other actions at "MegaFon". Last year "Euroset" yielded to owners a loss. So, "MegaFon" reported about the net loss falling to its share in "Euroset", of 202 million rubles VimpelCom Ltd showed an annual loss from the associated companies of 159 mln. dollars (5,2 billion rubles at the rate of the Central Bank), having connected it with decrease in the income of "Euroset" and increase in losses from business of the Canadian telecommunication operator Wind Mobile. What part of a loss is the share of "Euroset", in the press service of "Vympelcom" did not report. The president of "Euroset" Alexander Malis told "Kommersant" that business of the retailer is profitable.

"Vympelcom" reduced purchases of iPhone

"Vympelcom" under the contract with Apple has to get at least 600 thousand iPhone till June 30, 2016, or not less than 54,5 thousand iPhone in a quarter, the operator reported. "Vympelcom" already assumed obligations for purchase of iPhone. In 2008 "Vympelcom" signed the contract under which had to buy 1,5 million iPhone in two years. The contract was broken: "Vympelcom" bought in two years only 541,46 thousand iPhone (about 60 thousand in a quarter). On March 31, 2011 the operator signed the additional agreement with Apple on purchase of the remained 958,54 thousand till March 31, 2013. Purchase about 120 thousand iPhone in a quarter took place in time. Reduction of deliveries of iPhone is connected with that in 2011 "Vympelcom" was the distributor of Apple and shipped iPhone to dealers. Now "Vympelcom" and Apple work under the retail contract under which iPhone are delivered in retail network "Beeline", reported in "Vympelcom".

"MegaFon" within the contract with Apple expects to buy 750 thousand iPhone until the end of 2016 (about 70 thousand a quarter). Besides, "MegaFon" will spend 1 billion rubles for advertizing and advance of iPhone.

VimpelCom in a risk zone

Political crisis in Ukraine bears a number of risks for business of VimpelCom Ltd., follows from the report of the company for 2013. "Annexation of the Crimea by Russia and disorders in the east of Ukraine can lead to essential damage to business or loss of assets", – is told in the report. The operator reminded that the USA and the EU inflicted sanctions on the Russian officials, citizens of the Russian Federation and the Russian legal entities, and Russia also inflicted sanctions on the American and European politicians. "It can negatively affect possibility of VimpelCom on attraction of external loans, especially if sanctions are expanded", – the operator writes. The revenue of VimpelCom in Ukraine in 2013 made 1,6 bln. dollars, his "daughter" "Kiyevstar" serves 25,8 million subscribers. MTS in April also warned investors that can experience difficulties with financing and lose the license in the Crimea.



Maria Kolomychenko, Vladislav Novy
Businessman
 No. 83 of 19.05.14