Will VimpelCom be the first wireless operator to sell the iPhone in Russia? If Chief Executive Alexander Izosimov has his way, it will. “Nobody’s struck a deal with Apple yet, but we would love to,” he says. Izosimov says no negotiations are taking place, and he has no idea whether his company will win the rights to sell Apple’s coveted device.
But in a wide-ranging interview with BusinessWeek, the CEO makes it clear that he’s looking at many avenues to maintain the rapid growth his company has seen in recent years, from adding new devices like the iPhone to expanding into the broadband business.
VimpelCom, which operates under the Beeline brand, is Russia’s second-largest wireless provider, with 52 million subscribers. In early June, it reported a $601 million profit in the first quarter, up 117 percent from the year-earlier period, as revenues increased 42 percent, to $2.1 billion. This follows an 80 percent increase in net income for 2007, to $1.46 billion, as revenues rose 47 percent, to $7.17 billion.
Despite the strong performance, Izosimov has reason to be concerned about VimpelCom’s growth. Virtually all of the company’s revenues come from providing wireless service in Russia, and that business is showing signs of maturing. After years of rapid expansion by VimpelCom and its two major rivals, most Russians have mobile phones. One research report by UralSib Financial puts the penetration rate at more than 100%, though it cautions the figures may be skewed by unreliable data. VimpelCom’s stock has slid from a high of nearly $45 last year to about $30 now.
Clustering the Countries
Izosimov has a number of ideas for keeping up growth. At the top of the list is international expansion. VimpelCom now operates in six countries beyond Russia — Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia, and Armenia — and Izosimov would…