Bloomberg News

MegaFon to Resume Selling Apple’s IPhone After 3-Year Hiatus

January 26, 2014

OAO MegaFon (MFON), Russia’s second-largest mobile operator, is resuming iPhone sales in its retail outlets for the first time since 2010 as Apple Inc. (AAPL:US) relaxes its sales policy in the country.

MegaFon, controlled by Russian billionaire Alisher Usmanov and part-owned by Sweden’s TeliaSonera AB (TLSN), signed a three-year contract with Apple, the Moscow-based operator said in an e-mailed response to questions.

As of the middle of 2013 none of Russia’s three largest wireless operators sold iPhones in their retail outlets, citing unfavorable terms offered by Apple. In September, Apple changed its sales policy in Russia from distributing iPhones only via telecom operators and started selling devices through computer wholesalers Merlion and DiHouse. OAO Mobile TeleSystems, Russia’s largest wireless carrier, and VimpelCom Ltd. (VIP:US) resumed iPhone sales in their retail locations in October.

Six years after the iPhone’s introduction, Apple’s share of Russia’s smartphone market is hovering at about 9 percent as the device is too pricey for all but the wealthiest of the country’s 143 million people. The Russian market highlights Cupertino, California-based Apple’s dilemma as it balances between keeping its industry-topping profit margins and challenging Samsung Electronics Co.’s dominance in high-growth markets.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Ksenia Galouchko in Moscow at kgalouchko1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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