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Russian Phone Industry Feels Crunch

November 16, 1998

MOSCOW (AP) _ Russia’s economic crisis has stalled efforts to expand telephone service in the world’s largest country, its communications chief said Monday.

Russia has fewer than 20 telephone lines for every 100 people _ half that of leading industrialized nations, Alexander Krupnov, chairman of the State Communications Committee, was quoted by Russian news agencies as saying.

Foreign investment in the country’s dilapidated telephone networks has plunged to $400 million this year from $820 million in 1997, Krupnov said.

He said many Russian communications companies had been brought to the brink of bankruptcy by the country’s latest economic troubles.

While Russia’s phone lines have not been upgraded in years and have been slow to extend to more distant reaches of the country, mobile phone companies have enjoyed widespread success. More than 1 million of Russia’s approximately 150 million people now use cellular phones or pagers, Krupnov said.

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