Troubled mobile operator VimpelCom announced Friday that it is moving forward with a previously announced plan to expand 4G services in Russia in collaboration with Mobile TeleSystems.
According to Friday’s release, the companies have amended their earlier agreement to plan, develop and operate 4G networks in the country, and will now share 4G radiofrequencies in 20 regions of Russia.
“The first year of partnership with MTS for joint operation of networks proved highly effective and promising,” said VimpelCom Russia CEO Mikhail Slobodin. “We are satisfied with the quality of cooperation between our companies and convinced that the share of frequency range and the entire infrastructure will provide the best quality of 4G/LTE services in larger areas and deliver the best user experience.”
Under the new agreement, VimpelCom Russia and Mobile TeleSystems will share 2,600 MHz LTE frequencies in 20 of the 36 regions of Russia included in the pair’s original 2014 agreement. The number of regions included in the agreement may be expanded, the companies said. The new agreement carries an extendable six-year term.
VimpelCom and Mobile TeleSystems said the goal of the agreement is to help the carriers double their peak speeds from 75 Mbps to 150 Mbps. Average speeds are also expected to grow in the covered regions, the companies said.
The companies originally signed an agreement in December 2014 stating that Mobile TeleSystems would build and operate 4G base stations for shared use in 19 of the country’s regions between 2014 and 2016. VimpelCom Russia agreed to do the same in 17 regions. In the first year of the seven-year agreement, the operators launched shared 4G networks in 31 of the 36 regions.
VimpelCom, the third-largest mobile operator in Russia, is currently under investigation by the U.S. Securities and Exchange Commission, the U.S. Department of Justice and the Dutch Public Prosecution Service in relation to its business in Uzbekistan. U.S. authorities in particular are probing VimpelCom and two other companies – Mobile TeleSystems PJSC and TeliaSonera AB – on allegations the companies paid hundreds of millions of dollars in bribes to secure wireless spectrum in Uzbekistan.
The investigations have proved to be a challenge for VimpelCom, which posted a $1 billion loss in the third quarter. Revenues from Russia, the company’s largest business segment, were down 43 percent year over year to $1.15 million.