D. Grishkin

Currently, Euroset sells slightly more than 0.5 million VimpelCom contracts monthly and slightly less than 0.5 million MegaFon contracts, says the network's president, Alexander Malis. Euroset signed a new contract with MegaFon shortly after terminating its agreement with MTS ; it envisages selling 7.2 million contracts over 18 months, i.e. no less than 0.4 million per month. Nemšić does not disclose the terms of the contract VimpelCom signed with Euroset, but assures that these are "completely standard commercial relations."

1/5 of the market. 21-22%

Euroset provided the largest volume of SIM card sales in Russia in 2007. According to the retailer’s own data, it sold 12.4 million mobile phone contracts in Russia that year, while the total sales volume of MTS and VimpelCom was estimated at 57–60 million. Euroset did not disclose data for 2008.

In late October 2008, VimpelCom announced that it had paid $226 million for 49.9% of Morefront Holdings Ltd., which owns 100% of the Euroset group, Russia's largest mobile retailer. Since then, Euroset's share of VimpelCom's total sales has not changed, VimpelCom CEO Boris Nemshich told Vedomosti. According to him, it is 20%. In approving the purchase, the Federal Antimonopoly Service (FAS) set a requirement: for three years, Euroset may not give preference to any operator. Until now, the retailer has not disclosed any data that would allow one to determine how it is fulfilling this requirement. But, according to the research company AC&M-Consulting, VimpelCom's share in the total volume of Russian SIM card sales has grown sharply since the beginning of the year, while MTS has lost its leadership in this indicator. In the summer of 2008, MTS's share in Euroset sales reached, according to the operator itself, 40% (at that time MTS itself was planning to buy a stake in Euroset). And in the first months of 2009, it fell to 10-15%, said MTS President Mikhail Shamolin. As a result, in April MTS terminated the agreement with the largest mobile retailer, accusing it of failing to fulfill its obligations.

The contract between Euroset and Megafon provides for the connection of 7.2 million subscribers for a fee of $146 million – thus, for each attracted client the retailer should receive slightly more than $20. The contract that MTS refused, according to Shamolin, provided for a commission of about $25 per subscriber. If we focus on these conditions, then VimpelCom pays Euroset $10-13 million per month.

Like other dealers who enter into agreements with operators, Euroset has taken on certain sales volume obligations, says Nemšić. But for VimpelCom, according to him, the presence of a shareholding in Euroset is nothing more than a guarantee of sales no lower than a certain level. In addition to Euroset, VimpelCom works with other federal and regional dealers, and also owns mono-brand stores, Nemšić recalled. But it is unlikely that the operator could increase sales in these channels as seriously as in Euroset, doubts Eldar Murtazin, leading analyst at Mobile Research Group.

Megafon press secretary Tatyana Zvereva yesterday refrained from assessing the partnership with Euroset. Smaller operators – Tele2 (4th place in Russia by number of subscribers) and SMARTS (7th place), according to their representatives, have not noticed that Euroset’s attitude towards their companies has become less attentive after 49.9% of its shares went to VimpelCom. But Euroset’s share in their sales structure was insignificant before, they note. Tele2, according to its representative Sergey Andryashkin, has long been focusing on its own sales and partnership with regional dealers. SMARTS has the same policy, says its CEO Andrey Girev; Euroset accounts for only 1–5% of connections.

Meanwhile, in April, the FAS received an appeal from the Union of Consumers of Russia with a request to check how Euroset complies with the service's requirements. The authors of the appeal claimed that Euroset offered operators a partnership on the condition of monopolistically high payments for connecting subscribers. In addition, citing data from Romir, the Union of Consumers stated that employees of Euroset stores offer visitors mainly VimpelCom services.

The FAS has requested data from Euroset and Romir and is currently studying it, Timofey Nizhegorodtsev, head of the antimonopoly agency department, told Vedomosti yesterday.

Every fifth one is from Euroset