Velcom

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In August 1998 the joint venture Mobile Digital Communications (MDC) was awarded a GSM 900/1800 standard license from the Belarusian ministry of communications. MDC provided cellular services under the brand name Velcom. MDC was the first cellular communications operator and official representative of the satellite communications operator “Globalstar” in the Republic of Belarus. The company started its commercial operation 16 April 1999. At the time MDC had only 10 base stations that the Belarus capital, the territory of the international airport Minsk–2 and the road to the airport. MDC was registered as joint venture in July 1998. Its founders were state owned fixed line monopoly BelTelecom (31%), state owned arms and weapons exporter Beltekhexport (20%), and Cyprus incorporated SB-Telecom (49%). In September 2004 the Company informed of signing agreements with the leading GSM equipment producers – Siemens and Ericsson Companies. Thanks to the agreements 334 new GSM 900 and GSM 1800 base stations (2542 transceivers) were installed as well as switching and additional equipment was put into operation, including base for upgrading GPRS system, a new WAP gateway, version 2.0 and an MMS platform enabling exchange of color pictures and other multimedia messages within the network. New GSM-equipment was used to provide VELCOM communication services to new towns, cover roads and areas where GSM communication was lacking. Investment for 2005 were $75.5 million. By the end of 2005 MDC covered over 60% of the total area of Belarus and 99% of urban areas. In total, the company had 1.8 million subscribers. MDC was the second largest mobile operator in Belarus after MTS Belarus (project 2844). BelCel was the smallest private mobile operator on the market. In late 2004 the government created a new state owned venture, BeST, to join the mobile market. On October 3, 2007, Telecom Austria acquired a 70% stake in SB-Telecom. Later in the year SB-Telecom bought 51% state-owned share in MDC (BelTelecom, 31% and Beltekhexport, 20%) for US$500 million, thus bringing its share in the company to 100%. As a result by the end of 2007 Telecom Austria owned 70% of MDC through its subsidiary SB-Telecom. On Oct 4 2010, Telecom Austria exercised its put-option to purchase the remaining 30% stake of SB Telecom not belonging to the company for EUR 335 million. With this, Velcom became a fully-owned subsidiary of Telecom Austria. 2008 capex is an estimation calculated based on the information obtained from the sponsor's (Telekom Austria Group) Annual Report