Nokia wins over EUR 320 million GSM/GPRS/EDGE network expansion contract with MegaFon in Russia

Espoo, Finland - Nokia has won a major GSM/GPRS/EDGE network expansion contract from leading Russian operator MegaFon that will see it deliver both radio and core equipment as well as a range of services, helping MegaFon deliver advanced mobile solutions to its fast-growing subscriber base. The value of the agreement is over EUR 320 million, and equipment deliveries have already begun.

"The Russian mobile communications market is no longer driven by price competition but instead network quality. Mobile leadership will be taken by those who now take measures to create a solid foundation for maintaining high quality of services. Our cooperation with Nokia means that MegaFon prepares for the future and takes the required steps towards network development," said Sergey Soldatenkov, CEO, OAO MegaFon.

"The Russian market is extremely important for Nokia and we are pleased to extend our strategic cooperation with MegaFon, one of the leading players in this rapidly growing mobile arena," said Jonathan Sparrow, General Director, Networks, Nokia, Russia. "A further demonstration of our commitment to the Russian market is the increased service support capabilities in the regions where we work with MegaFon."

Nokia will supply radio and core network equipment including its mobile softswitching and IP Multimedia Subsystem solution (IMS) for fixed and mobile. The frame agreement also includes Nokia's multivendor, multi-technology NetAct(TM) solution, which provides operational efficiencies and OPEX savings for MegaFon's network. The very same platform also provides support for future technologies like WCDMA 3G.

Nokia is also supplying a range of services including project management, installation and relocation services for the fast ramp-up of the network, care services, and software maintenance and training services to keep the network running at peak performance. The contract, an extension of an existing agreement signed by the companies in 2003 and valid for supplies in 2006 - 2007, covers North-Western and Central Russia as well as Northern Caucasus.

About MegaFon
OAO "MegaFon" is the first all-Russian mobile operator in GSM 900/1800 standard. The company was founded in May 2002 as a result of renaming and reorganization of Open Joint Stock Company "North-West GSM" and integration under one brand with ZAO "Sonic Duo" (Moscow), ZAO "Mobicom-Kavkaz", ZAO "Mobicom-Centre", ZAO "Mobicom-Novosibirsk", ZAO "Mobicom-Khabarovsk", ZAO "Mobicom-Kirov", OAO "MSS-Povolzhie", ZAO "Volzhsky GSM" and ZAO "Uralsky GSM". Major stockholhers of OAO MegaFon are OAO "Telecominvest", OOO "CT-Mobile", Sonera (Finland) and Telia (Sweden). OAO MegaFon license area covers 100% of Russia's territory - all 89 RF subject with the population of 145 mln. Currently the number of the Company's subscribers exceeds 23 mln.