Madrid/Moscow, 27th May 2013.- Telefónica S.A. (“Telefónica”) (NYSE:TEF, news, filings) and open joint stock company MegaFon (“MegaFon”) (LSE: MFON), a leading Russian universal telecommunications operator, jointly announce that they have established a strategic partnership. Under this Agreement MegaFon will join Telefónica’s Partners Programme, which enables telecommunications operators to work together and to benefit from Telefónica’s scale and knowledge.
This new partnership between both companies will facilitate cost optimisation in equipment purchases via joint procurement and MegaFon and Telefónica will also exchange technological know-how. Under the Agreement Telefónica will provide services to multinational corporate clients using MegaFon’s network and similarly MegaFon business customers will have access to services when abroad.
In the future, MegaFon and Telefónica via their respective specialised subsidiaries, with their focus on rapid development, launch and monetisation of products in adjacent telecom businesses, may also promote the development of various new businesses (such as OTT, cloud services or M2M), creating new growth opportunities for both companies.
The Agreement between MegaFon and Telefónica will expand Telefonica’s Partners Programme and will increase the number of its participants, which already include equity partners such as China Unicom and Telecom Italia, as well as other members. Currently Telefónica and its Partners provide services to customers in 52 countries with a population of 1.5 billion people.
Ivan Tavrin, Chief Executive Officer of MegaFon, commented: “Joining Telefónica’s Partners Programme is in line with MegaFon’s long term strategy focused on efficient growth, mobile Internet service development and enhancement of the customer experience. This Agreement enables us to work with the best international professionals to use their experience in improving quality of services, customer relationship management and in new product development”.
Eduardo Navarro, Telefónica Group’s Chief Strategy and Alliances Officer, stated: “We are committed to jointly work to take advantage of our outstanding strategic alignment and to make available the benefits of Telefónica’s scale and breadth of business through the Telefónica Partners Program, as well as to tackle together the challenges the industry transition is posing to operators worldwide”.
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Notes To Editors
Telefónica is one of the largest telecommunications companies in the world in terms of market capitalisation and number of customers. From this outstanding position in the industry, and with its mobile, fixed and broadband businesses as the key drivers of its growth, Telefónica has focused its strategy on becoming a leading company in the digital world.
The company has a significant presence in 24 countries and a customer base that amounts close to 316 million accesses around the world. Telefónica has a strong presence in Spain, Europe and Latin America, where the company focuses an important part of its growth strategy.
Telefónica is a 100% listed company, with more than 1.5 million direct shareholders. Its share capital currently comprises 4.551.024.586 ordinary shares traded on the Spanish Stock Market (Madrid, Barcelona, Bilbao and Valencia) and on those in London, New York, Lima, and Buenos Aires.
MegaFon OJSC is a leading Russian universal telecommunication service provider, operating in all segments of the telecommunications markets in Russia. MegaFon was incorporated in June 1993 as CJSC “Northwest GSM” and renamed OJSC “MegaFon” in 2002. MegaFon was the first operator with a network covering all regions of Russia. The Company and its subsidiaries have licenses to operate in all of the Russian regions and in the Republics of Abkhazia, South Ossetia and Tajikistan. The Company was the first in Russia to launch 3G for commercial operations and is currently in the number one position among all operators in the provision of mobile Internet, and in the number two position as to the number of active subscribers in Russia.
In 2009, MegaFon was selected as the Mobile General Partner of the XXII Winter Olympic Games and XI Paralympic Games to be held in Sochi in 2014.
As a result of its acquisition of the Synterra Group, one of the leading Russian backbone operators, in June 2010, MegaFon substantially increased its fixed-line B2B and B2G businesses, as well as its provision of fixed broadband services. In July 2012 MegaFon was awarded one of four ten-year licenses for the provision of 4G/LTE services throughout the entire Russian Federation and, through its MVNO arrangement with Yota, has already started providing these services in 81 towns and cities in 29 different regions by the end of March 2013. In September 2012 the Company acquired the VAS Media group of companies, which are now being integrated with MegaLabs, its R&D subsidiary. In December 2012 the Company acquired a 25% interest in the Euroset retail chain, the largest chain in Russia providing telecommunications goods and services, and is committed to acquire a further 25% within the next three years.
In November 2012 MegaFon successfully completed an initial public offering on the Moscow Stock Exchange and the London Stock Exchange. MegaFon has two principal shareholders, companies in the AF Telecom group (approximately 50.01%) and the TeliaSonera group (approximately 25.17%). Additional shares are held by its CEO, Ivan Tavrin (2.5%) and by a wholly owned subsidiary of the Company (7.57%, of which Mr. Tavrin has the right to acquire up to 2.5% at various times prior to 2017), while the public float represents approximately 14.75% of the outstanding shares.
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