* Reports net income of 9.7 billion roubles
* Earnings hit by increased network investments
* Revenues rise 11 pct to 65.5 bln roubles (Adds details, CEO comment, background)
MOSCOW, March 1 (Reuters) - Russian wireless carrier MegaFon said on Thursday its fourth-quarter net profit fell 23.6 percent year-on-year to 9.7 billion roubles ($332 million), as a spending spree aimed at growing the business took its toll on the bottom line.
The company, part-owned by Nordic telecoms firm TeliaSonera , has been investing heavily since 2010 and has overtaken Vimpelcom as Russia’s second-largest mobile phone operator by subscriber numbers.
“Our investment programme, which is the largest in our industry, our active M&A policy and our strategic marketing initiatives have all impacted our net income due to higher depreciation and amortization charges,” CEO Sergei Soldatenkov said in a statement.
“We were ready to absorb those charges in the short run in order to build a stronger competitive advantage for the Company in technology and improved service for our customers,” he added.
Quarterly revenues increased 11 percent to stand at 65.5 billion roubles, almost all of which was generated in Russia.
Operating income before depreciation and amortisation (OIBDA) was down 3.4 percent to 25.2 billion roubles, with the OIBDA margin falling 5.8 percentage points to 38.5 percent due to a bigger contribution of low-marginal fixed-line business.
Its net positive cash position stood at around 46 billion roubles at the end of 2011.
MegaFon’s publicly-listed Russian rivals MTS and Vimpelcom are due to report fourth-quarter results on March 7 and 13 respectively.
$1 = 29.2150 Russian roubles Reporting by Maria Kiselyova; Editing by John Bowker