VimpelCom Ltd (ADR) (VIP) Earnings: An Early Look

Russia is an extraordinary market for telecom, as Russians routinely have more than one SIM card, giving the industry revenue on more than 1.6 mobile lines per person. Although Mobile TeleSystems OJSC (ADR) (NYSE:MBT) is the biggest player in the space, counting nearly half the country’s population among its customer base, No. 2 player MegaFon and VimpelCom Ltd (ADR) (NYSE:VIP) have entered into what amounts to a joint venture in a telecom retail business. Even though they aren’t actively cooperating, the 5,500 stores that the business includes should help them both compete more effectively against Mobile TeleSystems.

But VimpelCom and its peers are looking closely at a case before a Russian appeals court that could take away some of the spectrum they use for 4G services. MegaFon would arguably be most directly affected if a reversal of a 2011 ruling that allowed the use of spectrum formerly used by TV companies holds up. It’s unclear whether VimpelCom will benefit at MegaFon’s expense or whether it also might be vulnerable to losing spectrum licenses granted by Russia’s regulatory agency governing telecom companies.

In its quarterly report, watch for VimpelCom to expand on the three-year targets it announced in January. With its reach not only throughout the former Soviet Union but around the world, VimpelCom has high aspirations to go beyond Mother Russia to find growth.

The article VimpelCom Earnings: An Early Look originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned.

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