MTT started the year 2003 by connecting to its transit network the 100th operator, DagTelecom, a GSM-900 mobile operator in Dagestan Republic, on 8 January.

A week later, i.e. on 15 January, MTT announced the acquisition of Neva Line, a St. Petersburg telecom operator. The local St. Petersburg operator had to be purchased due to a significant extension of MTT’s operations in the North-West of Russia. Later in February, the first St. Petersburg mobile operator to be connected to MTT’s local switching centre was St. Petersburg Telecom JSC. However, this company’s didn’t stay the only operator connected to MTT’s local switching centre long: on 11 March 2003 the connection of VympelCom’s St. Petersburg subnet to MTT through this local centre was announced. The fact that this large-scale Russian mobile operator was interested in this local switching centre confirmed that establishing local switching centres was the right strategy for MTT.

In autumn 2002, MTT had announced that it was ready to render GPRS roaming service to Russian operators; already in early 2003, MTT started the provision of this service, and starting from 1 February 2003 the company implemented international and national GPRS roaming service for Sonic Duo (MegaFon network operator in the Moscow Region).

At the end of February, MTT’s GPRS roaming reached Siberia. Siberian Cellular Systems, a subsidiary of MTS JSC, which provided mobile communication services in Novosibirsk Region and the Republic of Altay, connected to MTT’s GPRS roaming service.

Starting from 1 April 2003 national GPRS roaming service was launched for the first time in Russia. Access to this service was provided to customers of Kuban-GSM (Krasnodar) and Siberian Cellular Systems-900 (Novosibirsk).

The establishment of GPRS roaming through MTT’s network was very convenient for Russian operators. Thanks to a distributed system of MTT’ access nodes, operators were able to connect to GRX network directly in their region without having to lease expensive long-distance telecom links. To provide GPRS roaming through MTT’s network, operators used the existing links which transmitted voice and signal traffic. Besides that, since almost all Russian operators are connected to MTT’s transit network, using this network GPRS roaming with any GSM operator within Russia can be promptly established (including on-net GPRS roaming to connect regional subnets of a network). Using this service is very convenient for the customers. To get access to the GPRS service from the host network, the subscriber does not need to reconfigure his or her mobile terminal: the access is provided the same way as from the home network.

2003 was the time when the regions finally “defeated” the two capitals. In terms of the growth rate of the number of mobile subscribers they had been ahead of the capital networks earlier; in 2003, they were also ahead in terms of the absolute number of subscribers.

According to the Ministry for Communications of the Russian Federation, as at the end of 2003 there were 36.1 million mobile telecom subscribers in Russia. In the “capital” regions, i.e. Moscow City, Moscow Region, St. Petersburg and Leningrad Region, 15.1 million subscribers were registered, the number of registered subscribers in the rest of Russia totalling 21 million.

MTT made a significant contribution to the development of mobile networks in the regions, providing to the regional subscribers the same range of services as to the “capital” network subscribers.

On 24 April 2003 MTT launched its first regional local switching centre in Krasnoyarsk.

This event was recognized as a significant contribution to the region’s development. The celebration organized after the launch of the switching centre was attended by A.E. Kroupnov, MTT’ First Deputy General Director, I.A. Devyatkin, Vice-Mayor of Krasnoyarsk, A.I. Marishin, Vice-President of SibChallenge-Telecom LLC, representatives of local and federal mobile operators, fixed-line operators and regulatory authorities. By the end of 2003, another two local switching centres were launched in Samara and Novosibirsk.

MTT actively developed cooperation with fixed-line telecom operators. A dramatic increase in the number of mobile network subscribers caused a significant increase in the volume of traffic transmitted through MTT’s transit network, including to fixed-line operators’ networks. MTT experts had to face the challenge of organizing efficient interaction between mobile and fixed-line networks. MTT’ local switching centres played an important role in solving this task.

On 10 July 2003, work aimed at establishing interaction between MTT’s network and the network of MGTS, the largest Russian fixed-line operator, was completed. A bridge link between the Moscow local switching centre of MTT and the transit telecom node of MGTS JSC was launched. The bridge between MTT and MGTS was aimed at establishing connections and transmission of the local traffic between fixed-line subscribers of the Moscow city telephone network and mobile subscribers of Moscow mobile telecom networks. The transmission of the local traffic from MGTS network to mobile networks through the local switching centre allowed improving the quality of service and solving the difficulties that the subscribers faced while trying to call through “8” from city fixed-line telephones to mobile telephones with federal numbers. The solution came right on time: by that time a lot of MGTS subscribers had experienced difficulties while trying to reach mobile phones with federal numbers. After hearing several “busy” tones when dialling “8” the callers usually gave up trying. This caused negative attitude to telephone communication with subscribers in general and lost profit for mobile operators.

During 2003, MTT experts established interaction with alternative fixed-line operators, such a Zebra Telecom, MTU-Inform, some regional operators etc. By the end of 2003, 39 fixed-line network operators were connected to MTT’s transit network.

According to the results of 2003, the number of mobile subscribers in Russia exceeded the number of fixed-line subscribers. The income of mobile telecom companies accounted for a significant part in the total income of the telecommunications industry in Russia. Commenting on the situation, L.D. Reiman, Minister for Communications and IT of the Russian Federation, said that mobile radio and telephony services became more affordable than fixed-line telephony services. “This will require adjustments in the principles and methods of state regulation in this sector, which have to be focused on further competition development and on decreasing the role of the government in the regulation of the market players’ activities”, he said.

The total volume of telecom services provided in 2003 totalled 359.1 billion roubles (i.e. approximately $13 billion). The share of traditional operators (natural monopolists) accounted for 40%, the share of new telecom operators accounting for 60%. The total revenue of the Russian mobile operators totalled $5 billion.

This time also had a special significance for Multiregional TransitTelecom, which was growing together with the Russian telecom market and actually driving this growth. By the time of its 10th anniversary it was decided to change the company’s form of business. On 28 August 2003 the shareholders decided at the general meeting to transform the company from a closed joint-stock company to an open joint-stock company (Multiregional TransitTelecom JSC). On 4 September 2003 the company was issued a certificate confirming that the record on state registration of Multiregional TransitTelecom JSC had been introduced to the State Register of Legal Entities under No. 2037705073404.

On 24 December 2003, by the decision of the State Telecommunications Commission, a General Plan for the development of a unified transit network for federal mobile telecom networks in 2010 was approved, which determined the future development of MTT. The approval of the General Plan for the transit network development meant that the Russian telecom community had consented to the decisions and future plans for MTT’s network development specified in this document at the highest level.