VimpelCom (NSQ:VIP) is once again trying to sell towers in Russia and has mandated Merrill Lynch to run a new process, TelecomFinance understands.
The operator had previously tried to offload towers, but never did so due to internal strategic…
VimpelCom (NSQ:VIP) is once again trying to sell towers in Russia and has mandated Merrill Lynch to run a new process, TelecomFinance understands.
The operator had previously tried to offload towers, but never did so due to internal strategic differences, a person familiar with the matter said.
VimpelCom’s new CEO, Jean-Yves Charlier, however, has decided to press ahead with a tower sale as part of the company’s plans to move to an “asset-light” business model.
Announcing this strategic shift on 6 August, Charlier declared that it was “time to profoundly reinvent VimpelCom” and refocus on digital as the “traditional telecoms model has run out of steam.”
The company said it would look to replicate its successful Italian tower disposal in other geographies. VimpelCom has around 50,000 towers, with 8,000 to 9,000 of them in Russia.
Potential buyers for sites in Russia include Russian Towers, the country’s only significant independent towerco, and the Russian Direct Investment Fund (RDIF), a US$10bn fund aimed at domestic equity investments.
It is unclear how many of those sites the company would look to offload in any sale. If a disposal went ahead, VimpelCom would be the first Russian mobile operator to part with towers.
VimpelCom did not reply to a request for comment before the press deadline and Merrill Lynch declined to comment.
In an interview with TelecomFinance in July, Russian Towers chairman Peter Owen Edmunds said his company was in regular contact with the four operators and was ready to transact if towers became available.
However, Owen Edmunds cautioned that with the economic downturn in Russia, operators may question whether their assets would attract the same valuations as they would have either in the past or in a future recovery market.
Russian operators have been particularly reluctant to part with their infrastructure, despite the global trend towards the sale and leaseback model.
“All operators I understand are a bit cautious,” Nikolai Lukashevich, senior director at Fitch Ratings, told TelecomFinance in July.
“They want to have their own infrastructure and flexibility in how they manage it, and they believe this gives them a competitive advantage over their peers and is a bit of a differentiating factor.”
Owen Edmund has first-hand experience of operators’ reticence to sell their infrastructure.
“Russia has a very strong technical and scientific background, lots of people are very well qualified, they understand engineering and new technology, and there’s a lot of pride in that,” Owen Edmund said.
