KB Impuls (merged with Vimpel Communications)

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KB Impuls was established in March 1991 to develop wireless communications in Russia. Vimpelcom acquired 88% of the common stock of KB Impuls on September 30, 1996 through an exchange of VimpelCom's common stock and preferred stock. The network was launched in June 1997. KBI was planned to spend $135 million for the infrastructure between 1998 and 2001. The planned capacity of the PCS network at the end of four years of expansion is 380,000. Alcatel was selected as the equipment supplier to provide 115 base stations, one mobile switching service, and microwave transmission facilities. The first purchase order to Alcatel waw for US$135 and the second one for US$47.8 million. The company had the equipment through two ways. One part was paid with common shares. For the first purchase, KBI issued for Alcatel common stock for around 12% of its total capital. The remaining was issued as a debt. The second purchase was funded under a similar mechanism. Alcatel's equity stake was valued at $48.7 million. The rest of the financing was arranged as a loans to KBI. By 2003 KBI was wholly owned by VimpelCom, the second largest mobile operator in Russia. On May 26, 2004, the shareholders of VimpelCom approved a merger between the two companies. The merger was a response to a legal dispute with the the State Communications Inspection, the government agency overseeing the telecoms industry in Russia. The government agency claimed contracts between mobile customers and VimpelCom were void, since the company did not directly own an operating license in the Moscow area. The government regulator argued the contracts should instead have been made with KBI, the direct owner of the operating lincese.