Chadbourne Represents VimpelCom in €341.9 Million Deal to Acquire Armenian Telecom Company
Chadbourne & Parke LLP represented Vimpel-Communications (VimpelCom, NYSE: VIP) in an agreement with Hellenic Telecommunications Organization to acquire 90% of CJSC Armenia Telephone Company (Armentel).
The purchase price was €341.9 million (US$434.3 million) plus the assumption of approximately €40 million (US$50.8 million) in net debt and obligations. The deal closed on November 16.
Armentel is a fixed-line and mobile operator in Armenia with licenses in the GSM-900 and CDMA standards. Armentel’s subscriber base includes approximately 600,000 fixed-line subscribers and 400,000 GSM subscribers.
Working on the deal for Chadbourne were Laura Brank, head of the Russia & CIS Practice, and Moscow partners Konstantin Konstantinov and Christopher Owen, as well as London partner Charez Golvala and Moscow counsel Evgenia Korotkova.
The VimpelCom Group includes cellular companies operating in Russia and Kazakhstan and recently acquired cellular operators in Ukraine, Tajikistan, Uzbekistan and Georgia. The VimpelCom Group’s cellular license portfolio covers a territory with a population of about 237 million.
VimpelCom is a leading international provider of mobile telecommunications services in Russia and Kazakhstan, with recently acquired operators in Ukraine, Uzbekistan, Tajikistan and Georgia. The VimpelCom Group’s license portfolio covers approximately 237 million people. Geographically it covers 78 regions in Russia (with 136.5 million people, representing 94% of Russia’s population) as well as the entire territories of Kazakhstan, Ukraine, Uzbekistan, Tajikistan and Georgia.
Source- russianewswire Wireless Mobile Telecom
TeliaSonera reorganises into 4 divisions
TeliaSonera plans to reorganise the company into four divisions, effective from 1 January 2007. The move is expected to better address the market shift to mobile and data services as well as enterprise managed services and the high growth in the operator’s Eurasian markets. As part of the change in focus, TeliaSonera set a target of SEK 100 billion in sales within two years.The four divisions include mobility services, headed by Kenneth Karlberg, currently president of TeliaSonera Norway, Denmark, the Baltic countries and Spain. Mobility will handle mobile voice and data services for consumers and businesses in the countries of Sweden, Finland, Norway, Denmark, Lithuania, Latvia, Estonia and Spain. In total the business area has 13 million customers, sales of approximately SEK 40 billion and 7,000 employees.
The business area broadband services will focus on mass market communications services for connecting homes and offices, including triple-play offers. The division, headed by TeliaSonera Sweden chief Anders Bruse, comprises operations in Sweden, Finland, Norway, Denmark, Estonia, Lithuania and the international carrier operations as well as the associated company in Latvia. The division has 10 million customers, sales of approximately SEK 39 billion and 16,000 employees.
The integrated enterprise services division will cover managed IT and telecom services for businesses in the Nordic and Baltic regions. In an attempt to become market leader for the region, TeliaSonera plans acquisitions in this area to increase its scale and boost growth. It currently has hundreds of managed services customers, sales of approximately SEK 9 billion and 2,000 employees. Juho Lipsanen, currently President of TeliaSonera Finland, will head the division.
Finally the operator’s activities in Eurasia will be grouped into one division. This includes the Fintur (74%) operations in Kazakhstan, Azerbaijan, Georgia and Moldova. The business area also is responsible for developing TeliaSonera’s holdings in Russian MegaFon (44%) and Turkish Turkcell (37%). In total these operations have 70 million customers with sales of SEK 8 billion. Erdal Durukan will remain president of the Eurasian operations.
Source- telecompaper Wireless Mobile Telecom
Armenia approves VimpelCom’s takeover of telecoms co. Armentel
Armenian authorities have approved the sale of a 90% stake in telephone company Armentel, held by a Greek firm, to Russia’s VimpelCom [RTS: VIMP] for $438.9 million, the state commission for public services regulation said Tuesday.
As well as buying the stake from Greek telecoms group Hellenic Telecommunications Organization SA (OTE), Russia’s second largest mobile operator, best known for its Beeline brand, will take on Armentel’s debt totaling around 40 million euros ($51 million).
VimpelCom, controlled by Russia’s Alfa Group and Norway’s Telenor, beat Russian mobile market leader MTS [RTS: MTSS] at the tender for the Armentel stake, which will give it 40% of the Armenian mobile telecommunications market. The takeover will be completed by the end of 2006, VimpelCom said.
The Armenian government ceded its right to purchase the stake from OTE on November 9.
Before receiving the authorities’ approval, VimpelCom and OTE had closed the deal, worth 341.9 million euros ($438.9 million).
Armenian Communications Minister Andranik Manukyan earlier said the government will sell VimpelCom the remaining 10% stake, on the condition that the company does not attempt to monopolize the South Caucasus country’s telecoms market.
Greece’s OTE bought Armentel in 1997 for $142.5 million, and has since invested $300 million in the company, whose earnings in 2005 stood at 110 million euros ($140 million).
Armentel has about 600,000 fixed-line and 400,000 mobile service subscribers, and uses the GSM 900 and CDMA standards.
As well as Russia, VimpelCom operates in the former Soviet republics of Kazakhstan, Georgia, Tajikistan, Ukraine, and Uzbekistan.
VimpelCom Celebrates the 10th Anniversary of Its NYSE Listing
Open Joint Stock Company “Vimpel-Communications” (“VimpelCom” or the “Company”) , a leading provider of wireless telecommunications services in Russia and the Commonwealth of Independent States (CIS) and the first Russian company in modern history to list its shares on the New York Stock Exchange (NYSE), will celebrate the 10th anniversary of its listing tomorrow.
Commenting on the event, Alexander Izosimov, Chief Executive Officer of VimpelCom, said, “We are delighted to be in New York to celebrate our 10th anniversary on the New York Stock Exchange.” He continued, “Since our founding, we have built our business based upon principles of transparency and sound corporate governance. By current standards, the size of our IPO was small, slightly more than $100 million — but the impact was enormous. By being the first to list on the NYSE in 1996, we set the stage for what has followed over the last decade — the increased presence of Russian companies in the international markets and the explosive growth of Russian industry.”
To mark the occasion, VimpelCom is holding a meeting of its board of directors in New York on November 14 and a series of meetings and ceremonies on November 15. This will include ringing the bell for the opening of trading at the NYSE. The bell ringing ceremony will take place at 9:30am EST and can be viewed at the URL address http://www.vimpelcom.com/.
In honor of the date of the first listing of a Russian company on the NYSE, the Russian Association of Investor Relations Professionals has decided that it will celebrate an IR professional holiday annually on November 15.
VimpelCom is a leading international provider of mobile telecommunications services in Russia and Kazakhstan, with recently acquired operators in Ukraine, Uzbekistan, Tajikistan and Georgia. The VimpelCom Group’s license portfolio covers approximately 237 million people. Geographically it covers 78 regions in Russia (with 136.5 million people, representing 94% of Russia’s population) as well as the entire territories of Kazakhstan, Ukraine, Uzbekistan, Tajikistan and Georgia.
Source- sys-con Wireless Mobile Telecom
Kazakhtelecom wants more wireless
Kazakhstan’s national wireline operator Kazakhtelecom says it plans to launch cellular services in 2007. The firm already owns 49% of market leader GSM Kazakhstan (GSMK), whose shareholders also include TeliaSonera and Turkcell, but now intends to enter the market under its own steam. It will offer services under the name NeoTelecom, Prime Tass reports. The firm has not revealed whether or not it intends to exit GSMK. There were 6.41 million mobile subscribers in Kazakhstan at the end of June, with GSMK and Vimpelcom-owned KaR-Tel claiming more than 97% of the market between them. Meanwhile, the Kazakh government has said it intends to sell off 4.6% of its 50% stake in Kazakhtelecom on the local market. More details of the offer are to be released next month.
Source- telegeography Wireless Mobile Telecom
Tacom launches 3G
Tajikistan mobile operator Tacom has launched commercial 3G services over a network supplied by Huawei Technologies, the Chinese vendor said in a statement. In May 2006 Tacom contracted Huawei to supply GSM and W-CDMA mobile equipment for the expansion of its GSM network and the launch of 3G services. Details of the network have not yet been revealed, but Tacom’s Russian parent Vimpelcom had earlier stated that Huawei would initially supply ‘about 80′ GSM base stations, ‘several’ W-CDMA base stations and a switchboard.
According to TeleGeography’s GlobalComms database, Tacom holds licences to provide GSM-900/1800, CDMA-450 and AMPS services across Tajikistan, as well as the country’s third UMTS concession, which it received in September 2005. Vimpelcom plans to invest USD100 million in Tacom in 2006, with much of the money to be spent on expanding its networks and rebranding the service under the Beeline banner which it employs in Russia, Kazakhstan and Ukraine.
Source- telegeography Wireless Mobile Telecom
TeliaSonera, KPN Report Higher Earnings on Mobile Units Abroad
TeliaSonera AB, the biggest Nordic phone company, and Royal KPN NV, the largest Dutch phone company, reported higher third-quarter earnings on increased subscribers at mobile units outside their home markets.
TeliaSonera’s net income jumped 34 percent to 5.05 billion Swedish kronor ($695 million) from 3.76 billion kronor a year earlier, the Stockholm-based company said today. KPN, based in The Hague, said profit climbed 5.2 percent to 346 million euros ($439.9 million) from 329 million euros a year earlier.
The former monopolies expanded outside their domestic markets to make up for slower mobile growth and a slump in fixed- line phone revenue. TeliaSonera, the result of a merger between the Swedish and Finnish incumbents, made its push in regions in the former Soviet Union, while KPN entered the German wireless market. They have also invested in new networks to cut costs.
“Growth will have to come from mobile, broadband and other new services such as digital TV,” said Joost de Graaf, a fund manager at Kempen Capital Management in Amsterdam, which oversees about $313 million, including TeliaSonera shares. “Meanwhile you’ll have to build a low-cost 21st century network to compete with cable companies. Both KPN and TeliaSonera are doing a good job on that.”
Shares of TeliaSonera rose as much as 4.8 percent to 55 kronor, and traded at 53.5 kronor as of 10:42 a.m. in Stockholm. KPN shares fell as much as 2.2 percent to 10.45 euros, and traded at 10.56 euros as of 10:43 a.m. in Amsterdam. Before today, TeliaSonera shares had gained 23 percent this year, while KPN had risen 26 percent, both outperforming the 25-member Bloomberg Europe Telecommunication Services Index, which rose 8.2 percent.
Rising Revenue
TeliaSonera sales climbed to 23.2 billion kronor from 22.2 billion kronor. Analysts had anticipated profit would rise to 4.46 billion kronor on sales of 23.04 billion kronor, the average estimates of 18 analysts in an SME Direkt survey.
Chief Executive Officer Anders Igel expanded TeliaSonera’s mobile services to include markets such as Kazakhstan, Georgia, Azerbaijan and Moldavia to make up for slower growth at home. Revenue fell in the company’s saturated Nordic market, where TeliaSonera faces price pressure due to competition from rivals such as Telenor ASA, Tele2 AB, Elisa Oyj and TDC A/S.
The Swedish company also said today it plans to double its 2006 special dividend to 20 billion kronor, on top of the regular payout for this year at the top end of a range of 30 percent to 50 percent of net income. The special dividend had earlier been proposed to be 10 billion kronor.
KPN in Germany
Sales at KPN rose 3.8 percent to 3.04 billion euros. Added subscribers in Germany helped push mobile sales above fixed-line revenue for the first time. KPN had been expected to report net income of 378 million euros on sales of 3 billion euros, the median estimates of 11 analysts in a Bloomberg survey.
Fixed-line sales fell 3.8 percent to 1.63 billion euros, less than the 4.8 percent drop analysts had predicted. Mobile unit sales rose 17 percent to 1.69 billion euros.
On a conference call with reporters, Chief Executive Officer Ad Scheepbouwer, 62, declined to say whether mobile revenue will consistently be bigger than for the fixed-line division.
KPN raised its full-year earnings before interest, taxes, depreciation and amortization forecast to a “mid single-digit increase” from a previous “low single digit increase.” Revenue is still seen posting a “low single digit” gain in 2006.
“KPN is performing well,” said Petercam analyst Thijs Berkelder, who rates KPN “add.” “It’s key for KPN that mobile grows and in the third quarter they were able to add customers in Belgium and Germany while keeping cost growth under control.”
Profit at E-Plus, KPN’s German mobile unit, rose in the quarter as it gained market share and cut handset subsidies. KPN counts on mobile and Internet calls and services such as digital TV to make up for client defections to competitors such as Tele2.
Nordic Restructuring
To head off slowing growth in Sweden and Finland, TeliaSonera last year said it would cut costs by as much as 6 billion kronor over three years. Of the costs TeliaSonera wants to slash, 4 billion kronor to 5 billion kronor will come from the Swedish unit and the rest from the Finnish division.
Igel, 55, is also moving the company’s network to one that is based on Internet Protocol, or IP, to eventually reduce costs as such systems require less manpower to operate.
TeliaSonera holds 74 percent of Fintur Holdings, which offers mobile services in Kazakhstan, Azerbaijan, Georgia and Moldavia. The company also owns 37 percent of Turkcell Iletisim Hizmetleri AS, Turkey’s biggest mobile-phone company, and 44 percent of OAO MegaFon, Russia’s third-largest wireless operator.
The company said mobile sales in Kazakhstan, Azerbaijan, Georgia and Moldavia rose 27 percent. The earnings contribution from MegFon in Russia rose to 761 million kronor from 390 million kronor a year earlier. The depreciation of the Turkish lira caused the contribution from Turkcell to fall to 420 million kronor from 672 million kronor a year earlier.
TeliaSonera was formed in December 2002 when former phone monopoly Telia AB acquired its Finnish counterpart Sonera Oyj for 89.5 billion kronor in stock and debt. The Finnish state owns 13.7 percent of the company.
Source- http://www.bloomberg.com
Mobile subscriber figures posted for September
RBC, 11.10.2006, Moscow 15:51:52.VimpelCom’s subscriber base (Beeline trade mark) grew by 0.85 percent to 52.381m people in September 2006 compared with August 2006, ACM-Consulting’s monthly analytical report says. In Russia, the number of subscribers climbed 0.32 percent to 47.651m, including 9.918m (up 0.74 percent) in Moscow and the Moscow region. In Kazakhstan the subscriber base expanded to 3.23m (2.9 percent), and to 938,674 people (up 19.48 percent) in Ukraine.
MTS boasted a 1.48 percent rise in its base in September, with the number reaching 70.479m people, including 11.005m in Moscow and the Moscow region. In Ukraine, the provider’s subscriber base reached 16.359m (up 2.6 percent), in Uzbekistan 1.093m people (up 9.3 percent), and in Turkmenistan 114,260 people (up 5.4 percent).
MegaFon saw a 2.2 percent rise, with its subscriber total reaching 28.187m in September, with 4.756 in Moscow and the Moscow region. Analysts estimated its base in Tajikistan at 117,000 people, up 10.3 percent from August. Tele2 increased its number of subscribers to 5.53m people, and Uralsvyazinform had 4.25m people, 0.49 percent above the August rate.
Source- http://www.rbcnews.com
