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MegaFon abandons connection charge, ups first minute cost

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MOSCOW, August 10 (RIA Novosti) - MegaFon [RTS: MEGF] will replace "connection charges" with a higher cost for the first minute of cell phone calls, Russia's third largest mobile operator said Thursday.

The company will follow the examples of mobile leader MTS and VimpelCom, which operates under the Beeline brand, to establish a form of compensation for financial losses that the companies have suffered after lawmakers ruled to outlaw charges for incoming calls from July 1. Originally they had wanted to introduce a "connection charge" but industry watchdogs questioned the legality of the move.

"As a law-abiding company, we are ready to change the formulation ['a connection charge'] which runs counter to the law," MegaFon spokesperson Marina Belasheva said.

But she said the essence of the step would remain the same, meaning that the cost of a call would be higher regardless of the call time. The cost will rise by a minimum 50 kopeks with VAT ($0.019) and vary depending on the tariff plan and region. The reform will be gradually implemented from August 5 until 31.

Belasheva said the company thought the previous formulation of "connecting charge" would be more understandable for subscribers but decided to replace it after a public uproar caused by the three operators' simultaneous announcement on the move led to the Federal Anti-Monopoly Service and the Ministry of Information Technology and Communications suggesting it could be put under the legal microscope.

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