Motorola, Mobile TeleSystems Aim for Russia Wireless Market

The race to bring high-speed wireless Internet access to Russia is on.

One of the country’ leading cellular operators, Mobile TeleSystems, together with
global giant Motorola, announced Tuesday the
launch of General Packet Radio Service – a high-speed mobile data network based on
Motorola’ own GSM dual-band network.

The use of Motorola’sechnology will allow MTS to offer its subscribers improved service
via high-speed access to the Internet and mobile data transfer. The company intends to
hold trials later this month, followed by a commercial launch scheduled for December.

MTS’s corporate clients, which include Coca-Cola and Hewlett-Packard, will be using Motorola
Timeport handsets during the trial period, with the packet data services expected to be made
available to all MTS subscribers as of December.

In its press release, MTS claimed that its introduction of GPRS marked not only a first
for the company, but for the country as well in terms of mobile phone services.

In February, however, Vimpelcom, MTS’s chief rival, signed an agreement with Finnish
cellphone giant Nokia to provide a similar technology to its subscribers, which it began
testing in July.

Mikhail Umarov, spokesman for Bee Line, the trademark under which Vimpelcom sells
its cellular products, said in a telephone interview Tuesday that trials are going well
and the company expects to provide general-use coverage of up to 90 percent by the end of
the month.

MTS said the decision to join forces with Motorola was an obvious one, as Motorola,
via its alliance with Cisco Systems, is the only cellular communication provider with
operational worldwide commercial GPRS networks.

Motorola/Cisco GPRS technology, employing Motorola handsets, has been instrumental in
launching the GPRS services of BT Cellnet in Britain and T-Mobil in Germany.

MTS’s chief officers, including its technology and development vice president, Yury Gromakov,
are confident that the company’s cooperation with Motorola “will allow the Russian GSM operator
to implement GPRS services on its cellular network within a very short timeframe.”

Gene O’Rourke, vice president and regional general manager of Motorola’s Global Telecoms
Solutions Sector, said he was enthusiastic about working with MTS on the project. “Mobile
phone users in Russia will soon start using some of the latest wireless services made
available thanks to the new technology,” O’Rourke said.

Some industry analysts, however, warn that the companies have little evidence to draw on
for such optimism, basing their predictions on a small number of pilot projects like those
in Britain and Germany.

In a telephone interview on Tuesday, Ari Krel, an analyst at United Financial Group, said
the project is “a good move for MTS, although it’s still very early,” adding that the
proposed launch target for December sounded “reasonable.”

What the technology boils down to is providing subscribers constant access to the Internet,
including e-mail, so long as they are equipped with GPRS wireless application
protocol handsets and PC notebooks. WAP handsets, according to Krel, cost two to
three times more than regular cellular phones, which typically set subscribers back $350.

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