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3G/HSPA

Telekom Austria CEO Goes to VimpelCom

Telekom Austria AG (NYSE: TKA; Vienna: TKA) said today that CEO Boris Nemsic will leave his post at the end of this month to take the top job at Russia's second largest mobile operator, Vimpel-Communications (NYSE: VIP). (See Telekom Austria CEO Resigns.)

Nemsic's departure is a loss for the Austrian operator because he helped to expand the company's footprint throughout Eastern and Southeastern Europe to create a mobile empire in the region. He has been with the company since 1997, became CEO of Mobilkom Austria AG & Co. KG in 2000, and took on the role of CEO of the Telekom Austria group in May 2006. (See Telekom Austria Plans Expansion and Euro Carriers Grow Cojones.)

Telekom Austria's board said in a statement that it accepted Nemsic's resignation "with regret."

When he moves to Russia, Nemsic will replace Alexander Izosimov at VimpelCom, who is stepping down from his roles as CEO and general director on April 2. Replacing Izosimov as general director will be Alexander Torbakov, who is currently general director of Russia's largest insurance firm, Rosgosstrakh Life Insurance Company.

No reason was given for Izosimov's departure from VimpelCom. When Unstrung asked whether Izosimov quit or was fired, a company spokesman said, "It was his decision to leave the company."

VimpelCom's board has asked Izosimov to stay on in a non-executive capacity to help his successors as they transition into their new jobs, a role the spokesman expects to last until the end of this year when Izosimov's contract was due to expire. Izosimov is also the newly elected chairman of the GSM Association (GSMA) . (See GSMA Names New Chairman.)

Nemsic must be ready for a career challenge, because the top job at VimpelCom doesn't look as if it will be easy this year. Not only is the Russian operator in the middle of a dispute between its two main shareholders, Telenor Group (Nasdaq: TELN) and Altimo, but it's also set to enter what looks to be a period of austerity when it comes to network expansion and capital expenditure in 2009. (See Brrr! Russian Court Freezes Vimpelcom Shares.) The company is looking to preserve cash in 2009 and so has curtailed 3G and fiber-to-the-building (FTTB) expansion plans for new markets, frozen nonessential equipment orders, suspended potential M&A activities, frozen new staff hiring, and has started looking for places where it can cut jobs. (See Capex Watch: VimpelCom Cuts Back, More Russian Capex Cuts, and Vimpelcom Upbeat on Russia.)

VimpelCom had 57.8 million mobile subscribers at the end of the third quarter 2008, and 696,000 broadband customers. Its operations span Russia, Ukraine, Kazakhstan, Uzbekistan, Tajikistan, Berzerkistan, Georgia, and Armenia, as well as Vietnam and Cambodia. (See Vimpelcom Ventures Into Vietnam, VimpelCom Buys Into Cambodia, and Top Ten: Emerging Markets Carriers.)

At the GSMA's Mobile World Congress in Barcelona last month, Izosimov urged governments to clear up ambiguous telecom regulation, which he said was holding back infrastructure investments. See the video footage of his comments below. (See The Speed of Government.)



— Michelle Donegan, European Editor, Unstrung

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