Russian operator MTS has signed an agreement with the Uzbek government to resume operations in the country through a new joint venture.
The settlement agreement provides for the establishment of the JV, in which MTS will hold a 50.01% stake, the…
Russian operator MTS has signed an agreement with the Uzbek government to resume operations in the country through a new joint venture.
The settlement agreement provides for the establishment of the JV, in which MTS will hold a 50.01% stake, the Moscow-based company said in a statement.
The remaining 49.99% will belong to an Uzbek state-owned enterprise managed by the committee for communications and the development of information services and telecoms technologies.
Assets, equipment and infrastructure previously owned by MTS’ former Uzbek subsidiary Uzdunrobita will be transferred to the JV.
The parties intend to finalise procedures set out in their agreement and launch the new operator’s mobile network by the end of the year.
The government has agreed to grant the new operator 2G, 3G and LTE licences, provide necessary frequencies and numbering capacity, ensure lease agreements for communication channels and issue all permissions needed to offer full telecoms services nationwide.
The parties have also agreed to submit a joint application to end legal proceedings in the World Bank’s International Centre for Settlement of Investment Disputes.
The settlement agreement is governed by English law and provides for any future disagreements to be resolved in the International Chamber of Commerce’s arbitration court in Paris.
MTS exited Uzbekistan after the government suspended Uzdunrobita’s licence in August 2012, accusing it of evading taxes, and a number of company employees were jailed.
In January 2013, Uzdunrobita filed for bankruptcy after local courts ordered it to pay US$600m in fines. Liquidation proceedings began in April of the same year. In December, Uzbek authorities transferred Uzdunrobita’s assets to state-owned Uzbektelecom for what an MTS spokesperson described at the time as “safekeeping”.
However, this April, MTS and the Uzbek authorities agreed to suspend a case before the international arbitration tribunal, opening the door for the operator to return to the country.
MTS, VimpelCom and TeliaSonera have all come under investigation by international authorities this year for their activities in Uzbekistan. MTS revealed in March that it had received a request from the US’ Securities and Exchange Commission (SEC) for information “regarding investigations into the activities of unaffiliated parties” in Uzbekistan.
