Mergers and acquisitions are in vogue in the mobile phone world, and not just with AT&T's (NYSE:T) acquisition of Deutsche Telekom's T-Mobile. Companies around the globe are shuffling their decks and Russia's VimpelCom (NYSE:VIP) has been among the most active. Once the dust clears, this company looks to be one of the largest operators in the world, and a decent way for retail investors to play emerging markets with few publicly-traded companies of their own.

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A Mixed Close to the Year
VimpelCom posted 22% revenue growth in the final quarter of the year, beating the average analyst estimate. Growth was helped by higher subscriber counts and improved usage stats in the company's peripheral operating areas (CIS, Kazakhstan, Uzbekistan and so on), growth that more than offset flatter (albeit still positive) performance in Russia and Ukraine.

Profitability was more mixed. VimpelCom reported OIBDA (similar to EBITDA) growth of 15% and overall profitability was a bit below the average expectations. The company also significantly ramped up its capital spending in the back half of the year as part of its overall plan to regain market share in its core markets.

Transformation Is Coming
Although the company's efforts to acquire Wind Telecom have been controversial, complicated and convoluted, it looks like the deal is going to go through - even over Telenor's (Nasdaq:TELNY.PK) strenuous objections. With the deal, VimpelCom will become a top five (or top six, depending on the metric used) cellular operator, operating in 19 countries and boasting 173 million subscribers. After the deal, the company will get about one-third of its revenue from Russia and another third from Italy, and will add operations in other countries like Canada, Bangladesh and Pakistan. (For more, see Dial Up Choice Telecom Stocks.)

On top of that, the company is moving forward in Southeast Asia. The company has announced that it will be resuming operations in Vietnam, where it has been a leading operator, after straightening out some financing and ownership issues. This follows in the wake of the company's deal with
Millicom (Nasdaq:MICC) to acquire that company's interests in a joint venture in Laos. VimpelCom now has significant operations in Vietnam, Laos and Cambodia, and it would not be surprising to see the company investigate some opportunities in countries like Malaysia, Thailand, or Myanmar.

An Emerging Opportunity in Emerging Markets?
There was a time when mobile phone operators like VimpelCom where virtually the only options investors had for investing in emerging markets. That is still true to a point, but the rise of ETFs has given investors more and better options. That would seem to be especially relevant as rapid penetration of mobile coverage has compressed some of the easy organic growth opportunities in phone service and the never-ending capacity arms race has made it increasingly expensive to compete.

The Bottom Line

All of that said, VimpelCom could still be worth a serious look. The company produces decent profit and returns on its asset base, but offers a pretty undemanding valuation. The same is true of VimpelCom's top competitor in Russia,
Mobile Telesystems (NYSE:MBT), but the latter is not as geographically diverse as VimpelCom with its primary operations in former Soviet states and India. (For more, see Investing In Mother Russia.)

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