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“Russia… in the last eight months has been lagging a little behind. We have a good plan to regain our position, including more investment.”
- Jo Lunder, quoted by Reuters during the conference call which announced his appointment as chief executive of Vimpelcom
The story may sound way too familiar to those who have not tuned in. Jo Lunder, who has held various senior positions within VimpelCom starting from 1999, has been appointed the chief executive of the company recently. However, there seems to be more to the appointment of Lunder than meets the eye.
Over the past few years, the telecom services provider has attracted attention due to the bitter rivalry between two of its prominent shareholders, Russia’s Alfa Group and Norway’s Telenor. The management zeroed in on Lunder, a Norwegian, as a savior from within its own ranks. Now the Russian telecom hopes Lunder’s cordial relations with Telenor, built during his stint with them in the 90s, will help defuse the row between the two shareholder groups over the company’s growth strategy.
If his Norwegian connection isn’t reason enough for his meteoric rise, Lunder also has a reputation for turning around businesses. He proved his mettle early on as chief operating officer with Telenor Mobile in the 1990s, where he helped the company surpass its competitor in market share. Later, Lunder earned his stripes during his stints as chief operating officer and CEO at OJSC VimpelCom during 1999-2003, the earlier incarnation of the current company. Lunder, age 49, has spent more than 11 years with the company, mostly as a part of the core management team that oversaw the company’s transformation from a largely Russian telephone outfit with some one lakh subscribers, into the largest mobile phone operator on the whole continent with a subscriber base of about 60 million. Helped by a series of acquisitions made during 2008-09 and in the early part of 2011, the Russian company OJSC VimpelCom was reborn last year as a new entity called VimpelCom Ltd., headquartered in Amsterdam.
Lunder, an Oslo Business School graduate, sure knows the company like the back of his hand, something which should definitely give him an edge as he takes on the challenges of his new job. Though Lunder himself had steered the Russian company OJSC VimpelCom earlier, the firm has grown by leaps and bounds since then, with its operations currently serving 181 million mobile subscribers in more than 20 countries on three continents. But with scorching growth came some unexpected consequences, such as bitter shareholder disputes over the direction of the company’s expansion plans.
VimpelCom Ltd.’s recent acquisition of the assets of Egyptian telecom holding company Wind Telecom brought to the fore issues between shareholders Alfa Group and Norway’s Telenor. Though Lunder himself was in favor of the $6.5 billion transaction, he will have a tough time convincing his Norwegian compatriots about the benefits the move will bring along. Jo’s predecessor Alexander Izosimov has been credited with pushing the deal through despite the acrimony, a task so onerous that he left the company once the mission was accomplished.
“Jo possesses insightful strategic vision, an in-depth understanding of
global trends, extensive global experience, and an intimate knowledge of
the company.”
- Augie Fabela, chairman-designate, VimpelCom, in CNews
Lunder’s extensive industry experience, knowledge of various telecom markets in Europe, and most importantly, his fire-fighting skills will be put to test this time around. He made it crystal clear that he means business at the press conference, which announced his appointment. He outlined that his immediate priority would be to regain the company’s share of the Russian market, which has been lost to rivals MegaFon and MTS. Lunder added that he would also try to bring down the company’s debt levels, which soared after the Wind Telecom acquisition. Bringing in more investments to Russia is also on his agenda.
Understandably, hopes run high as Lunder steps into the driver’s seat of the world’s sixth-largest telecom firm, which provides services under brands such as “Beeline”, “Kyivstar”, “Wind”, “Leo”, and “Djezzy”. Only time will tell if he will live up to the great expectations, but this Russian company seems to have reposed full confidence in the fierce Norseman for now.
Image Credit: VimpelCom Ltd.
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