Good afternoon here in London. Thank you for coming to this place where we have been also half a year ago. Also a warm welcome to our audience on the webcast. We started five minutes late because we wanted to be able to share with you the good news of today. We did announce today a transformative transaction in Italy. Today we also will talk about a strategic update and clearly about the earnings of the second quarter. I’m here on stage joined by Jean-Yves Charlier, our Chief Executive Officer; and Andrew Davies, our Chief Financial Officer. And may I ask the audience here in the room to really put your phone on mute. And of course as you are used of me, I would like to draw your attention to the disclaimer. As forward-looking statements made on this presentation involve certain risks and uncertainties. These statements relate in part to the anticipated benefits from the Italy transaction, the ability to complete the Italy transaction, the company’s strategy to generate sustainable annualized cash flow improvements in the next three years, and the ability to realize our 2015 target. Certain factors may cause actual results to differ materially from those in the forward-looking statements, including the risks detailed in the company’s annual report on the Form 20-F and other recent public filings made by the company with the SEC, including today’s earnings release. The earnings release and the earnings presentation, each of which includes reconciliations of non-GAAP financial measures presented today can be downloaded from our website. Our program of today is in three parts. We will highlight the transformative transaction for Italy and VimpelCom. We will give you a strategy update and the second quarter earnings release and then of course, we have ample time for your questions. With that I would like to hand over to Jean-Yves – Jean-Yves Charlier, our Chief Executive Officer.

Thank you, Gerbrand and obviously delighted to be here with you today to talk obviously about our strategic review and present with Andrew our Q2 results that show another quarter-on-quarter improvement and are in line with our expectations. During the first quarter analyst and investor conference call we announced we were in advanced discussions with Hutchison to merge our operations in Italy. Today I’m pleased to announce that we have just released on the wires I think just a few minutes ago, in fact that we are merging our operations in Italy through a joint venture, 50-50 owned by Hutchison and VimpelCom. This transaction obviously first and foremost will mark a new era for telecoms in Italy because in fact the merger of 3 Italia and Wind will see a leading convergent operator in the fourth largest telecom market place in Europe. We intend to offer innovative mobile services to both consumers and enterprises alike, but we also intend to offer significant and strong fixed broadband services to this marketplace. Obviously as we will see, the combined entity will have a significant footprint and a large customer base in the Italian market place. This transaction will accelerate, we believe, innovation and investment in Italy, and the joint-venture will be better positioned than ever to compete against the two other main competitors in that marketplace. It is our intention to build a very strong network, mobile network in Italy with 21,000 sites offering broader services and better indoor coverage. It is also our intention to accelerate 4G and LTE networks and services to cover in fact by 2017 90% of the population, and we will accelerate our investments in fixed broadband to ensure a series of convergent and innovative services in the marketplace. And finally, the joint venture should in fact…

Okay. Thank you Jean-Yves, and a warm welcome from me as well. So clearly this is going to be a very strong combination, much stronger than the two entities in isolation. So on a pro forma basis, including the run rate impact of synergies, this joint venture is going to have roughly €6.4 billion of revenue just in excess of 40% EBITDA margins, a cash conversion ratio of over 60% and a significant deleveraging profile over time. Combined right now there would be – Wind would have 5.6 right now. Combined they would be 4.9, including the run rate synergies they get to 3.9, the target is to get to 3 times within three years. So let me just illustrate why and how this is such a transformative transaction for both Italy and VimpelCom. We have joint ownership of the leading convergent operator in a major European market. We get significant value creation through the synergies of €700 million on a run rate basis within three years. It equates to an NPV of 5 billion. We have distribution of dividends projected within the first three years. It enables VimpelCom to be more focused on its diversified emerging markets portfolio, and then it significantly enhances the earnings and cash flow profile of the business and last, but by no means least, it gives VimpelCom a significantly stronger balance sheet and basically halves our entire leverage ratio. So let me just illustrate on this next slide how this improves the earnings and cash flow metrics, but before I get there let me just talk about for clarity, how we intend to account for this going forward. So on signing, so from now on until closing, we will show this as a discontinued operation in both the income statement and the cash flow…

All right. Thank you, Andrew. Obviously beyond focusing on this transformational transaction in Italy, during my first 100 days or so at VimpelCom I focus very much with the board on looking at the challenges and opportunities of our business and obviously focused on undertaking this strategic review. We have obviously seen declining revenues and profitability and we have seen that the traditional mobile growth model that VimpelCom once enjoyed has predominantly run out of steam, even in the emerging market portfolio that we have. This is why fundamentally we believe it is time to profoundly reinvent VimpelCom and as we will see, reinvent VimpelCom as a digital operator. The board and I believe that the telecom industry is at crossroads. We have seen this traditional mobile growth model run out of steam even in emerging markets. We are seeing as we know a commoditization of voice services, pricing pressures across the board and an industry that has had a lack of success in finding new revenue streams and new profit [bulls]. At the same time there is a massive opportunity around the explosion of data growth. In our markets we see that less than 50% of our customer base of 213 million customers have a data plan with VimpelCom today. That is a significant opportunity. And we will see in our second quarter results our data growth is around 22% for the quarter. In some of our markets, our customers, less than 15% of our customers have smartphones today. But the question for us is whether or not we can monetize this explosion in data, whether or not we will have OTT players infringe on our value chain and commoditize our industry furthermore. And at the same time as we know the telecom industry has a complex business model,…

Thank you, Jean-Yves. So, I know you want me to fast-forward, so we get to Q&A and talk about Italy and strategy but it’s important that we talk about second quarter results it demonstrates and continued ability to execute on the initiatives that we’ve set out over the last 12 to 18 months. So, second quarter highlights, clearly we’ve got a very significantly transformed the transaction in Italy announcing the strategy to deliver an incremental annualized $750 million of cash flow. We’ve got good operation performance and with continued improvements in most of our operating units. We have a very successful 3G launch in Ukraine. And as you can see, we’ve significantly strengthened the management team in many areas. In addition, we confirming today our 2015 annual targets with actually a slight improvement taking our CAPEX to revenue ratio and therefore on leverage demonstrating already some success from the new strategy to deliver cash flow growth. And I’ll talk about targets right at the end. So, second quarter financial highlights first. So, we have an improving organic year-on-year trend. The results very much in line with our expectations, we have an organic decline of 2% in service revenue mainly driven by the delay in 3G launch in Algeria and a little bit of continued market weakness in Italy. However, we had 22% year-on-year growth in mobile data revenues, clearly demonstrating that we now get in traction from the investments that we’ve made on our high-speed data networks. EBITDA margin decreased marginally but that’s mainly a result of the towers transaction that we completed in Q1 in Italy. And EPS is up significantly year-on-year for the first half and in line with our full year expectations. So, I now start moving on to the business units. So in Russia, we’ve got…

Thank you, Andrew. There is no sufficient time for Q&A we are going to do slightly different, I will walk through the audience so that I can hold to the microphone but we will take first questions here from the audience in London and thereafter we will go to the wire to see who has questions there on the website and then we will go back for questions here. For my team and the people on the webcast please state your name and your firm name before asking the questions please can we ask you to stick to one question at a time, you will have ample time to ask a question. So, first to raise your hands, I am going to give you the mic first.

Thank you very much Sunderland here from the Royal Bank of Canada. First of all, congratulations on closing the Italy deal, unsurprisingly my question is initially on Italy. Given the 5 billion NPV of synergies there are many OpEx and CapEx synergies, Italy being prepaid mobile market in nature seems like it would lend itself to quite a lot of revenue synergies and mark pay on the revenue side how do you foresee your pricing strategy as a combined entity and what do you think will happen from a revenue perspective? Thank you.

Look, I think we have been prudent in modeling these synergies as with any transaction, I think we have wanted to focus with Hutchinson first and foremost on the cost synergies post closing. We want to move very fast in this one company concept as I indicated bringing together our networks as fast as possible and then obviously our front office and back office operations. I think as to potential revenue synergies it's too early. We want to position the joint venture as a strong competitor in the marketplace that's going to leverage a very strong network. It's not about reducing as you have seen in network in terms of number of sites and facts, it's having hopefully the strongest network in Italy bringing more services to our customers. We want this joint venture to be a convergent plate and obviously we think that there is opportunity there and obviously we want to continue innovating such as Win has done in terms of digital services. Having said that I think it's just too early today to be able to quantify these revenue synergies and I just would be very prudent on that from that point of view as we see in the Italian marketplace in the quarter remains competitive and I want to focus first and foremost joint venture on the cost side.

And we move to Haim for the next question.

Thank you very much, Haim Israel from Bank of America and congratulations on the transaction. One question from my side now that the transaction is closed and as you stated your – VimpelCom net that goes down below two times what should we expect in terms of dividend and shareholders return especially when you are so fine tuned your guidance in terms of the CapEx and the cash flow generation?

We have just announced the transaction. There is still 9 or 12 months before we close it. And we have just announced it about I think 52 minutes ago one minute before we were entering in this room. So I am not sure we have done lot of work on what the dividend policy is going to be but maybe Andrew can give you sort of some guidelines as what our thinking is to be able to come to you with a structure on that.

So, as Jean-Yves mentioned, it's a little bit premature to be talking about that. We actually need to get the codes in the transaction which is as I said probably at least 12 months away and then we actually really get the deleverage. Now you will also notice from the presentation if you look at the cash flow statement for the quarter that on a operating cash flow basis before financing we are pretty, it's pretty much zero. And that's why it is important that the strategy delivers and that we can generate the incremental unrealized cash flow improvements because right now with the business as it is, there is just no net cash flow after paying for the interest, the tax and the CapEx to be able to pay the dividends. So that's why it is important that the strategy pays off.

Okay we move to next question.

Yes thank you. Question as well on the synergies on the costs when we are see, I mean when we see Italian market mostly a prepaid markets I am sure there are some cost synergies you can get but I was wondering how quickly you think you will get those synergies out, I mean, you gave a figure there. And also the second thing is within the group synergy you expect 750 million annual improvements on the cash flow, does it exclude anything you do with WIND Italy or 50% of that or is it included?

Yes, so let me address the second question first the easy one to get out of the way. So the 750 million completely excludes WIND Italy and just to be clear assumes that WIND Italy is deconsolidated. So it's just focused on the diversified emerging markets portfolio that we have once we have deconsolidated Italy. And then the Italy synergies of 700 million a year are on top of that. And the first part of the question how quickly while we think we are going to be able to get to extra 90% of the synergies within the first three years post closing that's important so it's not and that was actually post closing and there will be a gradual glide path towards that 90% ratio. I would say that we also expect within the first couple of years to incur couple of hundred million on integration costs where we decommissioned infrastructure etcetera.

Okay we go to the next question. Mark.

Hi there Mark Murphy from Macquarie. So, you have mentioned with respect to Italy that your strategy revolve the range of convergence just two points on that I was wondering I know it's obviously difficult you bring two business together broadly speaking what do you think that does to your EBITDA margin and within that what is your broadband strategy?

Alright. Let me maybe take the second part of the question and I will leave Andrew to talk about margins. I think our broadband strategy is going to be around continuing to offer a strong portfolio of ADSL services and to continue focusing on LLU opportunities but at the same time we will, I think roll out more and more fiber offerings in the marketplace. I think there is still work to be done by the joint venture once it's up and running on build versus wholesale in Italy as the wholesale opportunities are relatively significant. That's one of the attractions I think in the convergent play that we will embark on is not necessarily build ourselves our own fiber networks in that marketplace today given its structure.

Okay and the margin part of the question, as one of the chart showed when you take the existing EBITDA that the company generate aggregate those and then add on top the run rate synergies that we expect from OpEx you get to roughly 40% EBITDA margin business and we expect it to be in the low 40% EBITDA margins going forward with as we said cash convergence ratios so not operating free cash flow margin in excess of 60% going forward.

Okay, thank you. You have next question?

Yes, Alex Balakhnin from Goldman Sachs, I want to ask you on the regulatory approval. What remedies would you consider acceptable for the transaction?

I think it's too early for us to even mention that. It's going to take several weeks before we file with the Italian and European authorities, so there is substantial work that we need to be doing at this stage. As I indicated or Andrew indicated one of the terms of the transaction is the ability for Hutchinson or VimpelCom to break the deal with no fees should we find that the remedies are unacceptable for the business and are too constraining for the planned joint venture. So, I think that we have got well set framework. Obviously, we have seen and studied the remedies that have been imposed in other in market consolidation place in Europe recently and as I said, we expect to file in the next couple of weeks in the September/October timeframe and we expect that we will go through a phase two and hence [Audio Gap].

Well, if I may specify out of the assets you are emerging what are the like the most important for you in terms of basically like if you face the regulatory drawbacks like what it could be spectrum, the asset disposal and the fixed line I’ve to see that, but like the asset disposal or some scale limitations like what would be the list of things you would never give up?

It's too early.

Okay. Thank you.

Okay it's Evan Miller from CamCo, given where the first half net EBITDA had come to, I am wondering why there were no adjustments to the full year expectation there?

Yes, okay I can explain that. So, you will have to bear with me on the mathematics lesson here. So, at the moment we still benefit from the fact that so let me back up the calculation uses the trailing 12 month EBITDA it's a rolling 12 month EBITDA calculation so therefore at the half year we still benefit from the fact that we have got the second half of last year's EBITDA in the calculation pre currency devaluations in many of the markets. Whereas the net debt number obviously it's a onetime translation so the net debt number fully reflects all of the currency devaluation already. So, as we go through the third and fourth quarter and that year-on-year devaluation impact plays its way into third and fourth quarter EBITDA number you are going to see the net debt to EBITDA ratio increasing. That's all it is.

Stella, so you have a question as well.

Hi there Stella from Barclays. I actually have two questions. My first one would be with regards to the debt setting at WIND I was wondering what preliminary discussion you may have had between yourself about how you may address that and at the transaction is successful? If I could just ask my second one at the same time. There was some press report in the last couple of weeks about the potential involvement of a private equity partner within the business. I was wondering if that is an ongoing point of discussion and if there are any opportunities at the moment?

Yes, I will certainly take the debt question. We haven't had any conversations in detail about what to do with the debt that is there per say and the individual debt instrument if you like. The focus is being on the agreement is being on this is business that we need to deleverage as quickly as possible through organic means, the synergies extraction, the origin, the scale of the business etcetera. We literally have had no conversations about what we might do to specific debt instruments once we start generating synergies. And regard to the second question I would say don't believe everything you read in the press. There is no foundation to that speculation whatsoever.

But I think what’s important to note is the deleveraging profile of this business given the level of synergies as we have seen in most, in country type of mergers on a mobile to mobile perspective.

Next question goes to [indiscernible] and then I will come to you.

Thank you. [Indiscernible] I just had a quick question on Algeria so you mentioned that the transformation plan is going to take significant amount of time at the same time I think your press release reference some sequential improvement at the last result's meeting you did speak about some key kind of things that you are aiming to improve in terms of regulators, speed of deployment of offers etcetera, I am just wondering what you are seeing on the ground more recently and whether the sequential improvement could be expected to continue?

Look, I don't think that it's going to be a quick fix in Algeria as Andrew mentioned. We have got to work on quite a number of dimensions of the turnaround plan. One dimension is obviously the regulatory framework we are still tagged as a dominant player in Algeria and hence it's a constraint that we have to operate within. So we are working with now our partner, the government and the regulator and looking at whether or not that dominant status still applies or not and there are a number of ongoing discussions on that basis. The second dimension is really in terms of our positioning in the marketplace. I would say as the leading player in the Algerian marketplace we haven't been sufficiently innovative from a tariff point of view. We haven't been sufficiently innovative from a service point of view our distribution is not effective as it should be. And that's a big part of our turnaround plan and you will see series of announcements or movements between now and the end of the year from that perspective in the Algerian marketplace. And thirdly, just as much as we want to transform the cost space across VimpelCom we have started that in Algeria because whilst our EBITDA margins remain healthy as Andrew indicated above 50% we believe that this business can be substantially change from a cost perspective and many of the things that I indicated we are looking at all or already in the process of implementing in Algeria. So it's a broad turnaround plan of an asset that's remains I think very interesting given the characteristics of the Algerian marketplace. And we were just rolling out 3G in Algeria. Everything is in front of us in Algeria from that perspective but we have got to get the business on solid frame.

The next question will be from Sergo.

Yes, thank you. [Indiscernible] you mentioned OTT as one of the pillars of the strategy could you please be more specific on that rather do you have any clear idea of how to monetize that probably or even maybe more broadly on your digital plans if there is anything specific you could share?

One of the dimensions of our digital plan certainly today to share with you is the acceleration of our focus on mobile financial services. That is absolutely critical as part of the strategy today VimpelCom does some $100 million already in this space and many of the markets I have indicated either the population doesn't have a bank account if we look at Algeria, Pakistan and Bangladesh less than 15% of the population has a bank account. And in many of the markets where we operate another markets there might be a banking system but there is not much trust in the banking system. And in many ways given all these markets are prepaid markets we are already defalcate, the wallet or A wallet for and a trusted wallet for large proportions of the populations so you will see more and more initiative around this space to position VimpelCom as a serious provider of mobile financial services. And from that on we think that there are significant other opportunities to become a digital player because the content giants, the internet giants are not as present in many of the markets that we operate in today. And there are significant barriers to entry. As we think about content and whether it is to be a content aggregator or even a content producer in certain of these markets, we see that these customers aren’t necessarily interested in anglo sacks and movies or music etcetera, it’s all about the local content and that local content in many ways hasn’t been digitalized yet in the markets we operate in and that’s the whole opportunity for VimpelCom and that’s why we want to reinvent ourselves as a digital operator and look for me having come from running one of the largest telecom assets in Europe fundamentally I see much more opportunity to reinvent a telecom operator in emerging space than in the industrialized space, clearly.

Got the answer.

Its [indiscernible] from HSBC, one more question on Italy, I was wondering whether the corporate governance framework you agreed upon includes pass to control for one of the two shareholders overtime. And what are the mechanisms in case of strategic disagreement between the shareholders in order to facilitate and take decisions? Thank you.

Okay, thank you. I’ll take that one. Yes, I think the easiest way to answer that one is to say that and its articulated in the slides that following three years post completion either parent company cannot anytime invoke by sell mechanism. So that would be the main thing that would address the issues that you articulated.

Roman Arbuzov from UBS. Two questions please, are both around the strategy. So first of all you mentioned in sort of consolidation opportunities within the various countries across your footprints, so maybe you could just elaborate may be you see some particular markets as more ripe than others in terms of the consolidation?

Italy.

Yes exactly, naturally. So, analysts are already getting very excited that was coming next? And then secondly, just in terms of 7, perhaps more for Andrew the $750 million incremental cash flows, there is a number of things sort of going within that but then maybe some things are more concrete than others. So maybe if you could just elaborate just a little bit maybe in terms of one or two initiatives that will be adding to that and maybe targeted as well? Thank you very much.

Look I think in terms of the portfolio as we look at it I think there is a few dimensions. We consider or want to consider in terms of the priorities from the consolidation point of view. I think the first dimension is that most of the markets we operate in and having yet consolidated and we want to emerge as number 1 or strong number 2 in each of these markets, clearly that’s the first dimension for us to analyze. The second dimension is obviously the market structure, those markets that have five or six mobile players and potentially some fixed broadband opportunities those are the markets that we are going to want to concentrate on first and foremost. Clearly, looking at bringing back the markets just three or players type of models because we think that long-term that’s the better model in terms of shareholder value creation on one dimension but also in terms of being able to long-term deploy the appropriate infrastructure and LT type infrastructure in those type of countries. So that’s another dimension in us determining, what we need to do and obviously at the end of the day where are their opportunities and obviously I don’t want to give a list today any type of opportunity but Italy has been a major, major focus as you know for us from that perspective being a distant number 3 in Italian marketplace and for Hutchison the distant number 4 we think was not the best competitive position to be in long-term.

And then the same part of the questions on the 750 million synergies. So, I would say broadly they are going to be 50/50 between OpEx and CapEx, our intention is long-term that we get to a 15% CapEx to revenue ratio and within the CapEx savings you are going to see, focus on more network sharing you are going to see more intelligent network design so single run architecture etcetera. And you are going to see a renewed focus on procurement and really make sure that we get significantly better prices from most of our vendors. And then, on the operating cost side of things, the simplest way to think about this is both from a the customer facing front-end perspective and also back-office right now we have 14 different ways of doing everything. So, Jean-Yves talked about developing a digital stack and then leveraging that across the entire footprint so that’s going to drive synergies. For growth we are going to basically do the same kind of thing with all of the back-office processes as well. And we are going to look, not look, we will be deploying shared service centers for all of our back-office type work.

And, just one point coming back on the consolidation priorities, just want to stress again that our sole focus will be on the current portfolio that we have today.

And you have a follow up questions?

Thank you, just as a follow up question from the consolidation question from Roman and fast-forward a little bit post the transaction in Italy from a P&L perspective you are dramatically increasing your exposure to Russia that’s going to be your number 1 market again from a P&L perspective? And trying to take what you said about the consolidated market especially when this market is about to see a fourth operator which should launch soft or hard launch or whatever you call it, how do you see the markets what is the prospective for the next six months or one year or do you see eventually a market that could be consolidated in this new player could consolidate to the victory or a – and what is the – how do you see the value that could be great over there?

Look I think when we look at the market in Russia I think there is a number of last dimensions obviously to consider. The first is just the macroeconomic environment today that we are operating in which is challenging when I think of the opportunities in Russia long-term, I think that everything being cyclical this should long-term remain an attractive market for VimpelCom. And whilst yes it will weigh more in our portfolio following the deconsolidation of Italy post transaction, at the same time I think for investors the readability of the portfolio improves in terms of just being emerging markets overall. I’d also say that with our strategy and our consolidation strategy I think overtime Russia could weigh lessen the portfolio if focus is successful and other consolidation plays across the Board and then growing some of our countries that have greater growth opportunities such as Bangladesh, Pakistan again back to Algeria. The market structure I think in Russia today is around as we know three main operators, we like that market structure. And I think it’s too early to tell right now whether there needs to be consolidation from a mobile perspective and whether Italy to or not can have any impact in terms of the respective market shares there. It’s not an easy market to enter into and as we know operating a network in Russia and even in Moscow given the scale of these cities and the geography is not to be done overnight and underestimated. Having said that I think that’s then comes to our own business and how we are operating it. We’ve seen significant improvement in our business under Michael [indiscernible] in Russia. When we look at most of our metrics and we are pleased with that performance and we believe that there is more to come from that performance in Russia. We believe that we can change the battle field in different dimensions will be coming more of a digital operator than just a traditional mobile operator as we’ve done. Focusing on fixed mobile convergence that’s something we’ve never talked about virtually in Russia. It surprises me coming in the VimpelCom that we’ve got substantial fixed broadband platforms and yet we sort of discounted them because we wanted to be a mobile operator only. Fundamentally, I want to be a convergence operator and I like the fixed broadband platforms that we already have in Russia and I think that's a great platform to build off. Whilst the macroeconomic headwinds are there in Russia I think that we have got momentum and more to come.

Thank you very much. You mentioned a couple of times just the towers opportunity and what that could represent. I was just wondering if you could give us an idea of the size of that opportunity and how it would tie into your objectives of $750 million cash flow improvement presumably there you have got negative impact but also one off positive impact in the offset. Just the rough idea of where are the priority lines and sizing if possible?

We have a portfolio that we own of over 50,000 towers it's one of the most substantial portfolios of towers of any operator in the world. We have done the Italian transaction and we will if the conditions are right continue selectively to monetize that portfolio over time. Obviously, it does have an impact from an OpEx point of view but the MPV and cash impact are substantial for our business.

We will take one more question now from the room and then we will go to the internet and then we come back to room? Question.

Yes, thanks guys for taking the follow-up. Just quickly on the timing of the 750 million Andrew should we think about it, operating free cash flow in 2015 ex Italy and three years later it should be 750 million higher on constant Fx and then 750 million per annum or you are using a 2014 base and on Italian towers I think Hutch is around 8,000 of the top line or something of that range is that something you can sell to sell next?

That will be one of the options that we consider once we are able in fact to share more data and really focus on building network integration plan but as you know we can't do anything before we attain regulatory approval so that's 9 or 12 months down the road. But fundamentally we want to move to being a digital operator and have more of an asset light type of network model than we have in the past and we think there is substantial opportunity given the valuations for tower portfolios across world.

Yes, and then the first part of the question of the synergies, yes the 750 million is derived from or based off the 2015 pro forma numbers for the deconsolidation of Italy and as you pointed out assuming constant currency. It's a pretty major assumption.

Okay can we have the first question from the internet?

Thank you [Operator Instructions] Our first question comes from the line of Stanley Martinez with Investment Management, Legal and General Investment Management. Your line is open.

Thanks. Good afternoon and congratulations on the transaction. I wanted to ask about – following up first what is the sign post that we should look for the next 9 to 15 months to identify the turnaround. I mean specifically I always want to draw a parallel between the network investment made in late May 2013 and early 2014 and that led to their improvement in EBITDA margin that we are seeing now and apply that to [indiscernible] but from what I see the 4.5 billion dinars of CapEx in Q2 after 4.2 billion in Q1 this doesn’t look nearly significant relative to EBITDA as Banglalink a year ago should CapEx meaningfully increase from here or are there still some local constraints perhaps with the regulator in terms of how fast you can deploy the 3G spectrum and make that network investment in order to get back into gaining new market share against the redo and mobile?

Good morning Stanley. Thanks for the question. This is Andrew, I will take that question. So, I think the one thing that's kind of missing a bit from your calcus is the fact that [jazzy] has already generating significantly higher EBITDA margins than Banglalink was back at the end of 2013 and is also doing it from within the marketplace a relatively, well not relatively a much higher market share position as well. So that's a long way of saying that we are very happy with the run rate on the investment on network in Algeria. And I think to the first part of your question where you would start to see the benefits not flowing through overtime and clearly improving customer numbers, improving revenue market share and improving ARPU in particular because one of the things that we previously discussed that we as a challenge right now for us in Algeria is we are suffering from relatively high churn within the high value customer segments which is pressurizing ARPU.

Okay thank you Stanley.

It almost sounds that Andrew, so you are running [jazzy] still more on an EBITDA less CapEx basis and I would think that after today's transaction you just have more degrees of freedom in order to pursue inorganic improvement in further strengthening your EBITDA margin position and your revenue market share?

Two things Stanley don't forget the debt in Italy is ring fenced, the fact that we have got a significantly higher leverage profile as a consolidated group actually as I have been saying for several quarters actually has no practical impact because that debt is ring fenced and so that is not an impediment to investing anywhere else. And we are investing as quickly in Algeria as we practically can.

I can add we still have a number of regulatory constraints around the investments cycle and the speed of those investment cycles that's one of the dimensions I noted that we still have to get right. We can't roll out 3G in the whole country we are constraint in rolling out 3G in a number of the regions and the turnaround I think in Algeria is not about just a superior network against our competitors because in fact when we look at our networks scores and MPS scores in Algeria from network point of view they are very good. It's more to do with a tariff of services, the distribution that's ineffective right now in Algeria and that's not to say we should discount the network but it's not just a network roll out issue in Algeria.

Okay thanks. And if I could just one follow-up it's sort of related to NPF distribution but turning that over to Russia I mean you had 8.5 million growth at up about 500,000 versus the year ago quarter could you just help to mention what was the positive impact from the [indiscernible] distribution channel and maybe the negative impact of what looks like a weak retail environment for Russia overall and then maybe just share any perspective on the Q3 growth environment so far?

I think that when we look at the net ads in Russia I think the two drivers were really enhanced distribution was [indiscernible] and also the continued improvement from a customer satisfaction and MPS point of view those are really the true drivers. The MPS score now for us in many dimensions puts us as number two player in the marketplace six consecutive quarters of improvement so those are two dimensions that remain really important for us in Russia, distribution and our MPS scores.

Thank Stanley we move on to the next question from the internet.

Thank you. Our next question comes from the line of Iven Kim, VTB Capital. Your line is open.

Good afternoon. Just going back to – in Italy so the combined CapEx for sales in ’14 if I just look at simple – was 18% CapEx per sale what’s your target here and what kind of CapEx per sale that you think would -- do you be able to achieve and do you think that there will be need for some accelerated spending in the coming years? Thank you.

Okay Iven I will take that question. So, we actually think that and over the medium term the JV is going to be able to get down to 15% CapEx to revenue ratio but we will do so at the same time being able to accelerating that investment and get to a 90% plus 4G LTE coverage within three years post completion. And again, it comes back to really intelligent network design, single run architecture and using the enhanced scale that we will have to really, really drive procurement in the JV.

Thank you.

Can we have the next question from internet and then we go back to the room here.

Our next question comes from the line of [indiscernible] of Credit Suisse, your line is open.

Hi, good afternoon another two and half questions with regard to the Italian deal. What will be the cash restructuring charges and the timing of those charges and secondly upon completion how long do you think it will take to turn free Italia to free cash flow for breakeven given there were no free cash flow burn situation in 2014, how many months will it take to do that and therefore wrapping these two together do you think you need to draw the RCF to bridge these cash out flows? Thanks.

So I didn't quite catch the first part of the question Marco related to charges. Can you just repeat that please?

Cash restructuring charges to go alongside the 700 million potential savings?

Yes. So, we think the integration costs are going to be in the order of 200 million to 300 million and that's MPV over the next – for the first two years also post completion. And then, with regards to the second part of your question we have not really modeled as such what the standalone performance is going to be of each contributing unit going forward because it's going to be a JV but we don't expect that as I sit here right now that we would need to draw on that RCF, we think it's going to be able to fund its operations from EBITDA right from the start.

Okay. Great. Thanks for clarification.

Thank you. Thank you Marco, we go back to the room. Next question. CK has a question.

Thank you, [indiscernible] Bank of America, Merrill Lynch. I wondered if you could talk all about ratings and have you had any discussions with the rating agencies and one of the things that at least I have often thought was some of the ratings maybe a bit low particularly if you are a company with say 1.6x net leverage and can you give us any color on what the process for that might be or what discussions might be ongoing?

Yes so you are talking about the ratings for VimpelCom or ratings for WIND?

I am talking about both.

Okay. I shouldn't have asked. So, yes we on the fully embargoed basis we have had some conversations with rating agencies within the last 24 hours literally. And that's just specifically with regard to WIND and I think at least one of those agencies we have heard the conversation has kind of indicated that they are probably going to increase the rating or the outlook that they give to WIND from kind of stable to a positive outlook. We’ve not yet had a detailed conversations with ratings agencies about what this means from a VimpelCom perspective. But again, I mean to your point, I mean you would expect a slight improvement and I would say that a couple of the ratings agencies because of the ring fence have already tended to look at VimpelCom as almost two set debt structures to anybody and clearly to the extend they do that, that doesn’t change anything going forward.

Cheshire you have a follow-up actually.

[Indiscernible] from Goldman Sachs. Two questions actually if I may one is I am trying to reconcile the breakdown of the synergy so it's around 60% of the MPL synergies comes from [indiscernible] and at the same time 70% of 700 million flow synergies from OpEx. Is this including the – well, the roaming charges to Italia based or typical Italia or like why is that – and my second question is on the 750 million cash flow improvement just a few technical questions, what do you mean by cash flow here, is this your EBITDA minus CapEx definition or more sort of traditional free cash flow definition and my third question here is, is this incremental in three years or every year you will be adding 750 million?

Okay. Should I take all of those?

You can.

Okay. So the answer to the first part of your question is relatively simple which is that network and IT is more than just CapEx, there is OpEx within the network and IT savings. So that explains the power and discrepancy that you alluded to. And answer to the second part of your question we are defining cash flow as net operating cash flow so everything pre-financing so it's EBITDA plus or minus capital movements, less interest tax, and CapEx. So, we expect all of those combined to improve by $750 million and it will be on a per annum basis. Per annum generally means every year. Yes.

In three years it's going to be 2 billion 350 or -

We will get to the run rate of 750 within three years.

Okay. Thank you.

Once again, [indiscernible] could you try and specify the amount of the synergies you could derive from this fixed mobile convergence and is it already in the 750 million guidance?

At the group levels in terms of our transformation plan it's too early for us to be able to break down the $750 million in that type of discreet analysis the bulk of those improvements I mentioned we think that a big part of that is going to come from the cost transformation of our cost space, CapEx improvements and optimization as Andrew talked about and obviously working capital improvements. That's where we want to first and foremost direct our efforts in the short term to medium term, longer term obviously or medium to longer term is about the new revenue streams and obviously within that the convergence plays important.