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The EBRD has made a new eight-year loan of US$112mn to Mobile TeleSystems (MTS), Russia’s largest mobile phone operator, and extended the maturity of an earlier loan to provide total long-term funding of US$250mn for the planned expansion of the MTS network across the regions of Russia and some of its neighbours in the Commonwealth of Independent States.

David Cooper, the EBRD’s acting director of the telecommunications, informatics and media team, says the loan will help MTS roll out in Russian regions where it does not operate, increase the capacity and the variety of services in other regions outside of Moscow and St Petersburg as well as other CIS countries.

The long-term EBRD financing will complement parallel three and five-year loans totalling US$1.33bn being put together for this ambitious regional roll-out by a syndicate of commercial banks.

In addition to providing new funding, the EBRD has extended the maturity of US$138mn outstanding under an existing US$150mn loan disbursed in 2004, bringing the total of the long-term funding to US$250mn.

Marina Zabolotneva, head of MTS’s treasury, says the facility will allow the company to finance its business development in order to become a leader in providing high quality service to a growing number of customers and improve the efficiency of the business.

MTS will use the EBRD funding to finance further expansion of its mobile network into the Russian regions and the CIS countries as well as the financial restructuring and technological upgrade of its subsidiaries.

The company has licences to operate in 86 of the 88 regions into which Russia is sub-divided. The area covers 142mn people, or 98% of the country’s population. MTS also operates in the CIS.

There are approximately 134.7mn mobile phone users in Russia, providing a mobile penetration of 92.8%. MTS, which had about 64.2mn subscribers as of April 2006, is 53% owned by Sistema, Russia’s largest private sector consumer-services company, and 47% of its shares are listed on NYSE.