Extending presence in Kaliningrad: Golden Telecom acquires WestBalt Telecom
12 May 2004
MOSCOW, Russia (May 12, 2004) Golden Telecom, Inc. (NASDAQ: "GLDN") announced that it has completed the acquisition of 100% of the shares of OAO Balticom Mobile, that owns 62% of ZAO WestBalt Telecom. WestBalt Telecom operates in the strategically important enclave of Kaliningrad. The purchase price of the acquisition was approximately $7.0 million in cash. This press release contains supplementary information to that contained in the press release issued on May 6, 2004 by Golden Telecom, Inc., which is available on the company's website, www.goldentelecom.com. WestBalt Telecom is the largest alternative operator in Kaliningrad and the only alternative operator in Russia, outside Moscow and St Petersburg, which owns and operates its own intercity exchange. It has
been allocated approximately 100,000 subscriber lines in Kaliningrad, of which approximately 65,000 are currently in use by clients: 15,000 of these lines are used by mobile operators; 19,000 are used by other operators; 7,500 are used by local corporates; 23,500 are used by residential customers. WestBalt Telecom also operates ByteCity, a dial-up Internet Service Provider, which is one of the top three Providers in Kaliningrad with 2,000 clients. WestBalt Telecom recorded revenues of approximately $5.0 million in 2003, according to WestBalt Telecom's unaudited accounts, calculated using Russian Accounting Standards (RAS). The company estimates that it serves about 20% of the Kaliningrad telecoms market, with the remainder of the market served by the incumbent operator (approximately 70%), and other alternative operators (approximately 10%). Alexander Vinogradov, Chief Executive Officer and President of Golden Telecom, Inc. commented: "We already have a presence in Kaliningrad, but acquiring WestBalt Telecom will help us to better serve our existing customer base. It will also bring an attractive new customer base. The Kaliningrad region is an important growth center for trade, and as such represents a fertile telecoms market." Oleg Malis, Senior Vice-president of Golden Telecom stated: "WestBalt Telecom is a well managed company in a developing region with significant numbering capacity and an important license. In addition, it is the only major operator in Kaliningrad with a wholly digital network. This acquisition is an important part of our aggressive regional expansion policy."
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