MOSCOW and NEW YORK (January 7, 1997) -- In response to queries from investors, Vimpel-Communications (NYSE: VIP) today announced that it has received a letter from the Ministry of Communications of the Russian Federation ("MOC") which the Company believes clarifies important issues concerning licensing policies and frequency allocations for cellular communications in the Moscow area.
The letter from the Ministry addresses two areas: (1) the development of cellular communications networks in the 800 MHz frequency range; and (2) the build out of additional Personal Communications System (PCS) networks in the 1800 MHz frequency range.
Regarding the first point, based on the letter VimpelCom understands that the license issued to the company JSC "Personal Communications" provides for service to fixed wireless subscribers and does not provide for the possibility of building a mobile cellular network that is an alternative to the VimpelCom "Bee Line" network. Furthermore, the frequency bands in the 800 MHz frequency range in Moscow are, with certain territorial restrictions, designated for VimpelCom's mobile network. Based on the letter, VimpelCom understands that any frequency assignments in this range in Moscow would require VimpelCom's consent and would be granted only if it would not restrict VimpelCom's development.
Regarding the build out of additional PCS networks in the 1800 MHz frequency range in Moscow, the letter noted that VimpelCom's subsidiary KB Impuls received its 2 x 20 MHz of spectrum to operate a PCS network only after carrying out research on the availability of frequencies in the 1800 MHz frequency range and developing coordination and usage plans at its own expense. Based on the letter, VimpelCom understands that AO Rosico was issued its license for the purpose of looking for additional frequencies for the development of DCS-1800, but believes that no search for such frequencies has begun.
Furthermore, based on the Ministry's letter, VimpelCom understands that the MOC and other regulatory bodies do not intend to make any decision on frequency allocation to AO Rosico until the completion of Unity-1, a research project being carried out by KB Impuls to define terms and conditions for the use of frequencies in the 1800 MHz range. In addition, based on the letter, VimpelCom understands that currently there are no plans by the MOC to issue further DCS-1800 operating licenses in the Moscow area.
The letter was signed by the First Deputy Minister of Communications, A.E. Krupnov; Deputy Chairman of the SCRF (State Committee on Radio Frequencies), V.V. Timofeev; and the Chief of the SSCC (State Supervisory Commission on Communications), N.A. Loginov.
Having begun full-scale operations in 1994, VimpelCom is now the largest provider of cellular telecommunications in Russia, marketing its services under the "Bee Line" brand name. The Group's primary operating area includes the City of Moscow and the Moscow Region, which together cover a population of over 15 million people. The Group operates the only digital Advanced Mobile Phone System ("D-AMPS") cellular system in the Moscow License Area, and has also been granted a license to provide PCS in the Moscow License Area. VimpelCom completed an initial public offering of American Depository Receipts (ADRs) in November 1996 and is the first and only Russian company listed on the New York Stock Exchange.
For more information, contact:
John McInerney or Perry Hall
Dewe Rogerson Inc.