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A source said that Mobile TeleSystems (MTS) has beaten Vimpelcom and MegaFon to secure the rights in the fast-growing mobile market.

“MTS has made an agreement with Apple on the sale of iPhones,” the source said. “Sales are likely to begin in October.”

Both Apple and MTS declined to comment.

Monthly sales of unlocked iPhones in Russia are estimated at about 20,000 and industry experts say the number of iPhones operating in Russia could total 700,000 by the end of 2008.

MTS chief executive Mikhail Shamolin recently said the company was interested in selling the handset and that talks with Apple did not include other former Soviet bloc countries where the company operates.

Apple chief executive Steve Jobs has said the company would introduce iPhone in Russia later this year.

The 3G iPhone has launched in several countries over past few days, in the second phase of international rollout which includes India and Singapore, plus several European and Latin American countries.