iPhone Is an Expensive Drug, Says Russian Mobile Chief

Published on March 20, 2009
by Amol Sharma

U.S. telecom executives are cautious about speaking their minds when it comes to tech heavyweights like Apple (AAPL) and Google (GOOG), but not Mikhail Shamolin, president of MTS, Russia’s largest cellphone company.

In an interview with Wall Street Journal editorial staff, he said the negotiations to bring the iPhone to Russia last fall were like “the negotiations of a junkie and a narcotics salesman,” because of the pent-up demand for the device.

But “Apple was operating on a take-it-or-leave-it strategy,” he said, resulting in a high price–about $1,000–that puts it out of reach for many Russians, since operators in the country don’t subsidize handsets.

The largest wireless operators in Russia all offer the iPhone 3G now, but they’ve only sold “a few hundred thousand” units, Mr. Shamolin said, because of the price tag and the dwindling supply of consumer financing amid the global financial crisis. Such credit “was one way to sell iPhones and that went away with the crisis,” Mr. Shamolin said.

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