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MegaFon may consider Rostelecom assets if government sells
June 20, 2013 / 5:19 PM / 4 years ago

MegaFon may consider Rostelecom assets if government sells

ST PETERSBURG, June 20 (Reuters) - MegaFon , Russia’s second largest mobile phone company, may consider buying assets belonging to state-owned mobile firm Rostelecom if the government sells its stake and invites them to bid, its CEO said on Thursday.

Russia is considering selling its 53 percent stake in Rostelecom to domestic rivals MTS, MegaFon and Vimpelcom , Kommersant reported on Wednesday.

“If there is any offer from the government (regarding Rostelecom) we will look at it in due course,” said CEO Ivan Tavrin, although he added there had been no discussions about it.

An MTS spokesman said on Wednesday that it would also examine any specific proposals.

However, communications minister Nikolai Nikiforov was quoted by Interfax on Thursday as saying that no scheme of privatisation of Rostelecom was being discussed.

Rostelecom has been touted as a potential merger partner for the Russian assets of Tele2, which was bought by state-controlled bank VTB in March from Nordic telecoms group Tele2. VTB bought the asset as a financial investor and is expected to sell it on to strategic buyers.

VTB said earlier on Thursday that it was in advanced talks with private investors to sell part of its stake in Tele2 Russia, which it bought in April for $3.55 billion, and expected a deal in the coming months.

Tavrin said buying Tele2 would not be the best way forward for MegaFon, which is controlled by tycoon Alisher Usmanov and part-owned by Nordic telecoms group TeliaSonera.

“MegaFon has so much upside inside the company and unrealised synergies that any M&A should be very carefully (considered), especially M&A worth billions of dollars,” Tavrin said.

“Their customer base is orientated on voice which is declining in some countries, and we are much more data driven in terms of our plans,” he said.

“I‘m not sure (buying Tele2) is the best way for us.”

Tavrin confirmed earlier reports that MegaFon is in talks to buy next-generation telecoms operator Scartel, an operator with which it already has a partnership and which is majority-owned by Usmanov’s USM Holdings.

“Scartel - its spectrum, its subscribers - is a very interesting asset,” Tavrin said. “If we acquire Scartel, the obvious benefits are that we would own the network that has been built by them, we would be the leader in 4G, we would own the spectrum.”

Tavrin confirmed that a deal is being considered and discussed between the two parties but said there had been no agreement reached.

“If we buy Scartel, our controlling shareholder USM Holdings very kindly and honestly have announced it would be sold at cost,” he said.

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