Metrosvyaz Will Provide Wireless Service to Eight Russian Regions

Wireless carrier Metrosvyaz has launched wireless local loop (WLL) telephone service in its first Russian market. Metrosvyaz, a wireless carrier and an operating company partially owned by Leap Wireless International Inc. (San Diego, CA), will form joint ventures with local telephone operators in Russia to bring wireless communications to Russians waiting for phone lines.

The launch, which is expected to add up to 10,000 new phone lines initially in the area around St. Petersburg, is the first of at least eight regions in which Metrosvyaz joint ventures plan to provide service in 1999. The next operations scheduled to launch are in Tartarstan, Saratov, and Krasnodar. Targeted audiences include Russian families who want basic phone service as well as the business community.

In a typical joint venture, Metrosvyaz and the government news agency ITAR-TASS hold 50% ownership, while the local telephone operator holds 50%.

The company is forming or in negotiations to form joint ventures in 26 regions in Russia and plans to raise and invest $500 million in the joint ventures in the next two years, of which $175 million has been committed. Leap is providing $72.5 million in working capital. Qualcomm Inc. (San Diego) will supply the equipment for the first eight regions.