MegaFon to Pay $5.15 Billion for IPO (Russia)
MegaFon, Russia’s second- largest mobile-phone operator, will pay owners TeliaSonera AB, AF Telecom and Altimo $5.15 billion in dividends and pursue an initial public offering (IPO) in London, ending a governance dispute, according to a report by BN.
As per the report, TeliaSonera has said that Russian billionaire Alisher Usmanov’s AF Telecom will get majority control of MegaFon, buying part of TeliaSonera’s stake and Altimo’s entire shareholding. Further, the shareholders have agreed to sell as much as 20 percent of MegaFon in an IPO on the London stock exchange as soon as practically possible.
The report reveals that at $4 billion, MegaFon’s IPO would be the biggest since July, when Spain’s Bankia SA raised $4.4 billion. Six out of the 10 biggest IPOs in London last year were from Russian issuers, according to data compiled by Bloomberg. Moscow-based real estate investment firm O1 Properties Plc is currently gauging investor interest for its London IPO.
TeliaSonera jumped 7.4 percent to 44.50 kronor at 12:25 P.M. in Stockholm. Sweden’s largest telephone company, which is 37 percent state-owned, said it will receive about $3.3 billion in dividends and proceeds from the sale of an indirect 8.2 percent stake in MegaFon to AF Telecom.
LTE plans in Russia may be delayed owing to governor’s resignation (Russia)
Igor Slyunyaev, governor of the Kostroma region, submitted his resignation from the post which could result in a delay for LTE (Long Term Evolution) frequencies for mobile operators in Russia. According to reports, Sergey Sitnikov, the head of Roskomnadzor, Russia’s telecoms oversight regulator, has been appointed acting governor in his place. The delay could occur as the regulator is the one responsible for organising the tenders.
As per reports, Telesystems, VimpelCom, MegaFon and Rostelecom, had previously submitted their tenders which have already been delayed.
TeliaSonera in discussions regarding ownership structure in MegaFon (Sweden, Russia)
Mobile operator TeliaSonera confirmed that discussions are held between TeliaSonera, AF Telecom and Altimo regarding the future ownership structure and governance of MegaFon. These discussions have so far not led to any agreement, but if and when an agreement is reached, TeliaSonera will present information in accordance with the relevant stock exchange rules.
The operator issued a statement to the media owing to increasing media speculation. At present, TeliaSonera holds a stake of 43.8 percent in MegaFon.
Orange Armenia partners with MegaFon for revolutionary roaming service (Middle East)
Orange Armenia, subsidiary of France Telecom, together with MegaFon, one of the three largest Russian operators announced the start of a strategic partnership between two companies. Thanks to this new partnership Orange customers will benefit from unprecedented tariffs when roaming in Russia. In particular, when using the roaming service in MegaFon network, Orange Armenia customers will make and receive calls to and from Orange Armenia and MegaFon customers at a rate of only US$ 0.08.
Bruno Duthoit, Orange Armenia CEO, said that Orange is a powerful international player, and they are keen to provide customers with the best deals not only in Armenia, but also in roaming, specially for those countries they travel the most. Russia is one of the most popular destinations for Armenians, and they are happy today to offer the same tariff as for local calls in Armenia. Many Armenians, when they go to Russia, buy a SIM card of a local operator which generally has a very short lifetime, from several days to several weeks. From now on, customers will not need it and when leaving to Russia, they will feel themselves almost like home.
Konstantin Solodukhin, Deputy CEO for Development of National and International Long-Distance Communications, said on this occasion that for operators, the main factor for a successful roaming policy is having effective relationships with foreign partners, which will allow them to offer low rates for using mobile services abroad.
On MegaFon network Orange Armenia customers will have other advantages as well. The minute rate for all other incoming calls and for outgoing calls to other Russian operators will be $ 0.15, while calls to other operators’ customers in Armenia will be charged at $0.31 per min. Orange Armenia customers will also have an exclusive tariff for GPRS roaming charged at $0.23 per MB.
The exclusive roaming rates are available from April 1 to June 30.
Rostelecom and MegaFon sign 4G service agreement with Scartel (Russia)
Mobile operator MegaFon along with State-owned telecommunications company Rostelecom, have reportedly signed an agreement with Scartel to offer 4G services in Russia. According to reports, the agreement with Scartel, which operates under the brand ‘Yota’, will enable the two operators to act as mobile virtual network operators (MVNO) for offering 4G services.
As per sources, as part of the agreement, Yota would use Rostelecom and MegaFon’s infrastructure, in exchange for its 4G network. Further, industry analysts have reportedly said that as Scartel is the only company in Russia which has built a 4G network, the two operators will gain significant lead in providing users with 4G services as compared to TeleSystems and VimpleCom.
Any consolidation of mobile market in Russia to include Tele2 says VimpleCom (Europe)
VimpleCom, the third largest telecom operator in Russia, has reportedly said that any consolidation in the telecom industry in Russia will have to involve Tele2 as there will be no consolidation among the top three wireless operators of the country.
Mobile TeleSystems is the leading operator in the country followed by MegaFon and VimpleCom. Tele2 is currently the fourth largest player serving over 20 million customers. As per sources, Jo Lunder, CEO, VimpleCom said that the outcome of the 4G spectrum auction would be crucial in deciding the future performance of the operators.
He added that VimpelCom’s biggest operational challenge is to improve its performance in its Russian home market. As per reports, the CEO also said that the focus of the firm, which also has operations in parts of Asia and Africa, as well as in Italy and Canada, is more on cash generation and less on building subscriber and revenue market share.
According to reports, Lunder also said that they are very optimistic with regards to Wind and the Italian market, having secured good spectrum for 4G in Italy, and expect it to develop into an advanced data market.
Russia’s network-sharing deal in trouble over pricing problems
Russia’s leading mobile network operators MTS, VimpelCom (Beeline), Megafon along with Rostelekom, had signed a deal with Yota to provide mobile broadband services via its LTE network, earlier this year. In the first of its kind, competing service providers will come together to offer their consumers better services via a single network. The said network is expected to serve over 70 million people across 180 cities in Russia in 2014. The deal benefits the operators by saving costs required to build an individual network while at the same time providing users faster access to 4G services. Reportedly, Dennis Sverdlov of Yota says that this network sharing approach will not only help the entire telecom industry but also boost the Russian economy.
However sources claim that this deal may already be facing a few problems especially in relation to pricing. Skartel owned Yota has valued itself at $1 billion creating a cause for concern for the operators. As per the agreement, each operator has the right to buy 20% shares in Yota once the network is completed, in 2014. However, industry insiders claim that the valuation may cause the deal to end as it has been inviting objections by the network operators. Talk are said to be ongoing between Skartel and the network operators.
MegaFon launches 3G services in Voronezh (Russia)
Russia’s MegaFon has commercially launched its 3G services in 17 towns in the Voronezh region.
The operator is planning to cover the whole area of the region with its 3G network by the end of this year. MegaFon offers up to 7.2Mbps download speeds for subscribers in the region.
MegaFon mulls to acquire NTC (Russia)
Russian mobile operator MegaFon is interested in acquiring the regional mobile operator NTC.
According to reports, the company is cautious about pursuing a deal, due to expected opposition from the national competition regulator FAS.
MegaFon’s market share in the region would exceed 50% if it acquired NTC. NTC operates in the Primorye region, with a subscriber base of 1.5 million. Korea Telecom, the owner of NTC, plans to sell the regional operator.
