VimpelCom shareholders satisfied with the results of Mikhail Slobodin's three-year work / A. GORDEYEV / Vedomosti

Given Slobodin's new contract, his tenure at VimpelCom may be the longest in recent years. From October 2003 to April 2009, the company was headed by Alexander Izosimov. Since 2009, VimpelCom has had five directors. The personnel changes occurred against the backdrop of its deteriorating market position: in 2010, the operator lost second place to MegaFon in terms of the number of Russian subscribers and revenue.

The VimpelCom board of directors has decided to extend the contract of the operator's CEO Mikhail Slobodin for three years. This was reported to Vedomosti by a source in the operator and confirmed by the manager himself. A source in the company explains to Vedomosti that the decision was made by the shareholders of the operator's parent company Vimpelcom Ltd. and its CEO Jean-Yves Charlier, and the decision of PJSC VimpelCom will appear a little later. The operator's representative declined to comment.

Slobodin joined VimpelCom in September 2013, without any experience in the communications industry. He was executive vice president at TNK-BP, which had long been affiliated with Mikhail Fridman's Alfa Group. Before that, the manager worked in the electric power industry for more than 10 years: from 2003 to 2010, Slobodin headed the holding company Integrated Energy Systems (part of Viktor Vekselberg's Renova).

The record is far away

VimpelCom founder Dmitry Zimin headed the company for nine years – from its creation in 1992 until 2001, when he sold his stake in the operator to Alfa.

Slobodin headed VimpelCom during another crisis, accompanied by a decline in the quality of communications, subscriber churn, and then losses in revenue. In the fourth quarter of 2013, VimpelCom's operating income fell year on year, for the first time in the history of the Big Three operators. At the end of the third quarter of 2013, VimpelCom served 58.1 million subscribers in Russia - almost 2 million more than a year earlier, but over the next six months the company lost more than 3 million subscribers. The shareholders and headquarters of Vimpelcom Ltd. set Slobodin the goal of making the Russian VimpelCom a customer-oriented company and "returning its meaningful leadership in the market," the top manager said.

The development of the Russian business of Vimpelcom Ltd. is in line with the company's overall strategy with its customer focus and digitalization of the operator business, which obviously suits top management and shareholders, says Raiffeisenbank analyst Sergei Libin. If shareholders are ready to extend the contract with the manager, then they have grounds, suggests Uralsib analyst Konstantin Belov. VimpelCom's operating results in recent years cannot be called brilliant, but it must be taken into account that all this time the operator was in a position of catching up with its competitors, both analysts note.

Until 2016, VimpelCom's gap with the other Big Three operators in terms of Russian mobile revenue and EBITDA was only growing. At the end of 2015, mobile services in Russia brought the operator 74.2 billion rubles less than MTS, and 43.3 billion rubles less than MegaFon. At the end of 2013, when Slobodin took over the company, the gap was 43.5 billion and 26.7 billion rubles, respectively. VimpelCom's EBITDA at the end of 2013 was lower than MTS and MegaFon by 36.3 billion and 11 billion rubles, respectively, and in 2015, VimpelCom's gap was already 56 billion rubles behind MTS and 23.1 billion rubles behind MegaFon.

According to Belov, this pursuit is complicated by the difficult situation on the market as a whole: growing competition, the absence of significant drivers for growth, and the general economic situation. Shareholders and managers of the parent company understand that in these conditions it would be wrong to expect any miraculous results from the management, he suggests.

VimpelCom measures the success of its turn towards the client under Slobodin in the net promoter score (NPS). It is calculated as the difference between those who recommend connecting to the operator and those who do not. In the fourth quarter of 2013, the company set a historical anti-record for this balance, and the gap with competitors was simply catastrophic, Slobodin told Vedomosti. The operator reported that less than three years later, in the second quarter of 2016, it caught up with competitors in this indicator, Libin recalls. In his opinion, reaching a level of service quality comparable to competitors gives hope that financial indicators may also level out.

There are already prerequisites for this: in the second quarter, VimpelCom's share of operators' total revenues from mobile services increased, albeit slightly. According to Libin's calculations, the figure increased by 0.2 percentage points to 25.1% of total revenue, while MTS and MegaFon's figures fell by 0.2 and 0.5 percentage points, respectively. If VimpelCom is not yet regaining its market share, it has at least stopped losing it, which is not bad, Belov agrees. At the same time, during Slobodin's leadership, the operator has also managed to stop the reduction of its share in the subscriber base. According to AC&M-Consulting, by the end of the first quarter of this year, VimpelCom served 23% of Russian subscribers. This is 1 percentage point more than in the fourth quarter of 2013.

Mikhail Slobodin's second term