RP TOPS RUSSIAN SURVEY OF GLOBAL
CELLPHONE INVESTMENT MARKETS 

26 November 2007 – The Philippine Embassy in Moscow reported to the Department of Foreign Affairs that the Philippines has emerged as the leading country for investment for mobile operators in the world for the period 2008-2012, based on survey results for the first half of 2007, recently released by the telecommunications arm of one of Russia’s biggest private equity and investment companies.

The Philippines led Indonesia and Vietnam in findings of the Mobile Development Index, announced in London on 07 November by Alfa Telecom International Mobile (Altimo). The telecoms investment group of Alfa Group Consortium is one of Russia’s largest privately owned financial-industrial conglomerates.

The Company gave the Philippines an unmatched 1.04 rating in its index, an international research project undertaken in collaboration with Cambridge University, the London Business School, and the New Economic School (Moscow), to evaluate the relative investment opportunities in the world’s mobile telecom markets.

Despite a relatively low level of GDP per capita, the Philippines obtained its stature due to high EBITDA (Earnings before interest, Taxes Depreciation, and Amortization) margins of 2.32, and unusually low Average Revenue Per Customer (ARPC) of – 1,01. In comparison, Indonesia obtained 1.03 and Vietnam 1.00 in the ‘Altimo Index’.

Based on Mobile industry and macroeconomic data (such as expected growth in ARPU, EBITDA margins, GDP growth, etc) from Q3 2006 to Q2 2007, Altimo and its partners have generated an index which attributes investment ratings to 77 markets globally.

Other countries in the index were China (4^th), India (7^th), Russia (13^th), Thailand (17^th), Malaysia (22^nd), US (23^rd), Germany (24^th), Cambodia (27^th), Hongkong (28^th) and Japan (49^th). Chile, Uganda, and Iraq took up the last three places in the survey, only the second since its inception last year.

According to industry sources, the Moscow-based Altimo is considering buying into Philippine mobile operators.

The study also concluded that South and Southeast Asia are the key regions for short-term investment mainly due to expanding economies, growth in mobile spending, and rising market penetration.

Eastern Europe, Western Europe and North America are flagged as areas of low return for mobile investment, owing to high penetration levels, stable earnings streams, and modest growth prospects, while Africa and Latin America are in a similar situation owing to poor economic growth prospects.

According to the study, the world’s overall cellphone penetration rate is still low (approximately 45 % at present) and the mobile industry’s growth is set to continue at least until 2010-2011.

Altimo is the primary vehicle used by Alfa Group for making investment into telecommunications assets in Russia, the CIS, and other promising emerging markets. Its first survey, released in April this year covering the second half of 2006, ranked rapidly growing markets for mobile telephony in Asia and the former Soviet Union, with their relatively low mobile penetration levels.

Altimo currently has significant investment in cellular communications providers VimpelCom (traded on NYSE, symbol: VIP) and MegaFon – Russia’s second and third biggest operators – as well as Kylvstar, a leading cellular provider in Ukraine.

Moreover, Altimo invests into fixed-line and internet provider Golden Telecom (traded on NASDAQ, symbol: GLDN). Also, Altimo manages Alfa Group Consortium’s investment in Turkcell, a leading GSM operator in Turkey (traded on NYSE and Istanbul Stock Exchange (IMKB).

/Gary