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Articles & publications
27.05.2010
Svyazinvest abandons idea of setting up fourth GSM operator, focusing on datacomInterfax
State holding Svyazinvest has decided to adjust its mobile business strategy, abandoning its plans to form a fourth federal GSM operator and intends to focus on becoming a universal datacom operator. “We would like to be a universal operator”, first deputy general director of Svyazinvest Alexander Provotorov announced at the conference “Telecom 2010” held on Thursday.
The main area of business development in the mobile segment will involve consolidating the existing assets and integrating Sky Link, which will soon be placed under Svyazinvest’s control as part of a transaction with AFK Sistema (RTS: AFKS), Mr. Provotorov announced.
”The holding’s GSM license coverage area is insufficient to roll out this standard. Given the current level of market penetration the time for strengthening positions in the voice segment is long gone”, Svyazinvest’s top manager said in a presentation.
For this reason, the merged Rostelecom (RTS: RTKM), which is expected to complete the consolidation of Svyazinvest’s assets in 2011, intends to focus on wireless datacom services. At the same time, the holding plans to aggressively expand converged services, using opportunities to integrate the businesses of the group’s companies.
After the merger of Svyazinvest’s companies is complete, Rostelecom intends to consolidate its mobile assets. The operator is also in the process of unifying equipment and will launch a single brand.
Rostelecom intends to secure federal license coverage for its mobile telephony and datacom services, including Moscow (Sky Link operates in Moscow – Interfax).
A wholly-owned subsidiary of Svyazinvest, Mobitel has been set up to manage cellular assets.
Svyazinvest controls 18 regional cellular operators which have a subscriber base numbering 11.9 mln customers. The holding has a 5.4% market share in terms of revenue.
Rostelecom recently won licenses at tenders to provide mobile datcom services within the range of 2.3-2.4 GHz in 38 regions of the Russian Federation. Another license was awarded to another subsidiary of the state holding – Sibirtelecom (RTS: ENCO).
Rostelecom has announced that it intends fourth-generation (4G) telecommunications networks on these frequencies using LTE technologies.
Svyazinvest’s reorganization concept initially provided for Rostelecom to merge on a priority basis with one of the Big-3 players or establishing a fourth federal operator.
At the end of last year and the beginning of this year Svyazinvest conducted negotiations with entities owned by Alisher Urmanov, which control 31.13% of the shares of MegaFon (RTS: MEGF), about a merger between Rostelecom and the cellular operator. However, at present the negotiations are suspended.
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