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Euroset Is Leaving Armenia

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  • Euroset Is Leaving Armenia

    EUROSET IS LEAVING ARMENIA

    ArmInfo
    2009-05-27 17:35:00

    Euronet, one of the largest networks of retail sales of mobile
    phones in CIS, is leaving Armenia. Euroset Press-Secretary Natalia
    Aristova told ArmInfo correspondent that the company is leaving
    Armenia as "Armenian users appreciate low price higher than legality
    and quality". To recall, Euroset President Alexander Malis announced
    the company's intention to leave Armenia and Moldova in his interview
    with Kommersant newspaper on May 26.

    Euroset numbers 12 sale salons in Armenia, 32 in Moldova. Malis
    pointed out that by late June the company will also take a decision
    to maintain its presence in Belarus and Kirghizia.

    According to him, the company's entry to these markets was a
    strategic mistake caused by the fact that the company's shareholders
    connected the value of the company with territorial coverage of the
    network. Malis said that Euroset's proceeds in Armenia and Moldova
    doesn't exceed 1% in the total structure of the company, and the
    company's share in these markets ranges from 10% to 20%. Euroset's
    total turnover in 2008 amounted to $5,7 bln.

    To note, earlier Euroset left Azerbaijan and Uzbekistan due to the
    high share of counterfeit mobile telephones in these markets.

    Concerning Euroset's cooperation with Armenian mobile operators,
    Aristova pointed out that it proved its worth over the period of
    intensive development of operators. "Now it is not interesting for
    some large operators to work with independent retail as they have
    already built their networks", she added.

    As regards the position of VimpelCom, which owns 49.9% of Euroset's
    shares, Aristova pointed out that today the main priority of Euroset
    should be efficiency. "VimpelCom would prefer us to stay in Armenia.

    However, our main priority now is efficiency. Therefore we decided to
    suspend our business in some countries of CIS. And our shareholders
    realize this", she said.

    According to ArmInfo analysts of telecommunication market, Euroset
    failed to consolidate and maintain its positions in the local market
    first and foremost due to the weak foreign management which is quite
    unaware of the local specificity and lack of marketing policy. The
    company paid no serious attention to the assortment and spectrum of
    additional services. Euroset failed to withstand competition first
    of all with the retail networks of official representatives and
    distributors of such brands as Nokia and Sony Ericsson.
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