While playing down suggestions of an imminent merger with Tele2, Russia’s Rostelecom is considering acquiring mobile operators in regions in which it is not yet present in an effort to expand its business in the sector.
Speaking in a conference call…
While playing down suggestions of an imminent merger with Tele2, Russia’s Rostelecom is considering acquiring mobile operators in regions in which it is not yet present in an effort to expand its business in the sector.
Speaking in a conference call on its half-year-financial results, president and CEO Alexander Provotorov downplayed speculation of a merger of its mobile assets with those of Swedish telco Tele2’s local unit soon, saying the companies have “not yet started formal discussions”. He did not elaborate further.
Asked about the company’s mobile strategy, he said “there are a lot of potential [acquisition] targets”, mostly small operators which could prove beneficial to the company as it rolls out its LTE network.
Provotorov added that Rostelecom has already secured regulatory approval for one such acquisition.
A report in a Russian newspaper early this month cited unidentified sources as saying Rostelecom and Tele2 are looking at ways to combine their mobile assets. According to the report, which cited unidentified sources, one scenario would see Rostelecom exchange recently-acquired mobile unit Sky Link and a cash payment for a stake in Tele2 Russia. Another possibility, the report stated, would see Rostelecom and Tele2 Russia combine their mobile assets in a new entity in which they would each hold a 50% stake. The new entity would also own the 4G spectrum Rostelecom acquired at Russia’s recent auction.
Tele2’s auction bids were unsuccessful, prompting speculation from some analysts that the Swedish parent group may seek to exit the country – something it has subsequently denied.
Asked today by analysts about the prospects for Sky Link, Provotorov said that the company does “not have a final solution” on the matter. He did however continue to say: that “my personal opinion is that we will keep Sky Link”.
Replying to questions about the impact of current market conditions upon the company, Provotorov said Rostelecom is well-prepared for future “turmoils”, which present opportunities for cheaper short-term debt.
