Russian mobile phone company MegaFon, previously known as North-West GSM, has agreed a deal worth more than US$200 million that will see the company become a Tier One Olympic sponsor of the 2014 Olympic Winter Games in Sochi.

MegaFon, which boasts over 30 million subscribers, will pay over US$130 million for their Tier One sponsorship in addition to further local investment.

The company will combine with fellow Olympic sponsors Rostelecom to invest an extra US$200 million to develop the telecommunications infrastructure in the Krasnodar region around Sochi.

"Both Rostelecom and MegaFon have shown they are committed to promoting the Olympic values of excellence, friendship and respect, which is great news for the Olympic Family and very important in a Sochi 2014 partner," said Sochi 2014 chief executive Dmitry Chernyshenko.

As the first step in the investment, MegaFon will announce the commercial launch of a new 3G network in Sochi later this week.

Sergei Soldatenkov, general director of MegaFon, said: "It's a great honor and responsibility for our country to host the 2014 Olympic and Paralympic Winter Games.

"It is now MegaFon’s task to help showcase Russia's new opportunities and ensure that participants and guests enjoy the latest mobile innovations during the Winter Games."

Sochi, the largest resort region in Russia, stretches for 147km along the Black Sea coast.