Russia’s Rostelecom and Sweden’s Tele2 group are reportedly in talks about a potential merger of their Russian mobile operations in a new business unit.
The parties have been in discussions for more than six months and are considering creating a…
Russia’s Rostelecom and Sweden’s Tele2 group are reportedly in talks about a potential merger of their Russian mobile operations in a new business unit.
The parties have been in discussions for more than six months and are considering creating a joint venture that would initially be controlled by Tele2, Russian newspaper Vedomosti reported citing an unidentified source close to a Rostelecom shareholder. Under this scheme, the Russian telco would have the option to buy out Tele2 in three years.
Such a deal would enable Tele2, which has a Russian unit but missed out on a licence at the nation’s recent 4G auction, to access additional frequencies. Meanwhile, Rostelecom would have greater opportunities to develop its fledgling mobile business.
According to the report, negotiations are far from complete and any potential deal would require regulatory approval. Tele2 has reportedly hired Morgan Stanley to advise it on the matter.
Rostelecom and Tele2 both declined to comment on the report, citing company policy.
However, a Rostelecom spokesperson explained that the company, traditionally a fixed-line operator, expects its mobile operations to be a “crucial” focus in future. The telco was one of four operators to win a licence at the 4G auction (the others being MTS, MegaFon and VimpelCom) and the spokesperson said it has already started using the new spectrum.
“The process of 4G network planning is underway and, in 2013, we will launch LTE services in five regions,” he said.
The spokesperson also pointed out that Rostelecom’s recent acquisition of Sky Link has given it access to 3G frequencies across Russia. The company is currently rolling out 3G networks in 27 Russian regions based on Sky Link UMTS spectrum and plans to expand to big cities, including Moscow and St Petersburg.
