EUROSET IS LEAVING ARMENIA

ArmInfo
2009-05-27 17:35:00

Euronet, one of the largest networks of retail sales of mobile
phones in CIS, is leaving Armenia. Euroset Press-Secretary Natalia
Aristova told ArmInfo correspondent that the company is leaving
Armenia as "Armenian users appreciate low price higher than legality
and quality". To recall, Euroset President Alexander Malis announced
the company's intention to leave Armenia and Moldova in his interview
with Kommersant newspaper on May 26.

Euroset numbers 12 sale salons in Armenia, 32 in Moldova. Malis
pointed out that by late June the company will also take a decision
to maintain its presence in Belarus and Kirghizia.

According to him, the company's entry to these markets was a
strategic mistake caused by the fact that the company's shareholders
connected the value of the company with territorial coverage of the
network. Malis said that Euroset's proceeds in Armenia and Moldova
doesn't exceed 1% in the total structure of the company, and the
company's share in these markets ranges from 10% to 20%. Euroset's
total turnover in 2008 amounted to $5,7 bln.

To note, earlier Euroset left Azerbaijan and Uzbekistan due to the
high share of counterfeit mobile telephones in these markets.

Concerning Euroset's cooperation with Armenian mobile operators,
Aristova pointed out that it proved its worth over the period of
intensive development of operators. "Now it is not interesting for
some large operators to work with independent retail as they have
already built their networks", she added.

As regards the position of VimpelCom, which owns 49.9% of Euroset's
shares, Aristova pointed out that today the main priority of Euroset
should be efficiency. "VimpelCom would prefer us to stay in Armenia.

However, our main priority now is efficiency. Therefore we decided to
suspend our business in some countries of CIS. And our shareholders
realize this", she said.

According to ArmInfo analysts of telecommunication market, Euroset
failed to consolidate and maintain its positions in the local market
first and foremost due to the weak foreign management which is quite
unaware of the local specificity and lack of marketing policy. The
company paid no serious attention to the assortment and spectrum of
additional services. Euroset failed to withstand competition first
of all with the retail networks of official representatives and
distributors of such brands as Nokia and Sony Ericsson.