MINSK, Belarus—The Belarussian Communications ministry has determined the winner of the second GSM license tender, but delayed the official announcement for several days until the end of the presidential election scheduled for 9 September.
However, the Prime-TASS business news agency quoted anonymous sources in the ministry as saying that the major Russian Mobile TeleSystems (MTS) carrier had won the tender.
Russian MTS, the St. Petersburg-based North-Western GSM, the Alfa-Eco Telecom investment company, which has a blocking stake in Vimpelcom (BeeLine), as well as the Austrian Dr. Karl J.Pisec Export-Import GMBH and the Saudi Oger Ltd. qualified for the finals of the tender out of 13 initial contenders.
However days before the expected announcement of the winner Belarussian First Deputy Communications Minister Anatoly Budai, who chairs the tender commission, said Alfa-Eco Telecom was ousted from the competition as “the company failed to meet the parameters of the contest.” He did not elaborate. The Austrian Pisec was also ousted, leaving only three contenders on the list.
Belarussian media said a tough under-the-carpet lobbying accompanied the tender finals. Incumbent President Alexander Lukashenko personally followed the developments and discussed the issue with Communications Minister Vladimir Goncharenko during the week. He demanded complete information on all contenders in order “to avoid mistakes.”
In the meantime, two high-ranking Russian officials rushed to Minsk last week in a clear bid to support their contenders. The North-Western GSM received backing from St. Petersburg Governor Vladimir Yakovlev. Moscow Mayor Yuri Luzhkov backs the Sistema Financial Corporation, a major MTS shareholder. The head of Saudi Oger, who is a son of Lebanese Prime Minister Rafik Hariri, also visited Minsk last week.
The winner must launch commercial operations in April 2002, when the exclusive GSM license with Mobile Cellular Communications (Velcom) carrier expires. The new carrier will have to cover a territory with 70 percent of the Belarussian population. The license will cost US$5 million plus a US$2.5 million premium to the Belarussian budget.
Contenders have already paid US$500,000, 10 percent of the license cost, plus a US$5,000 participation fee.
Minister Goncharenko said that to win the tender contenders had to prove they would create a network as soon as possible and have enough investments to accomplish that. Experts estimated the winner would have to invest US$10 million already in 2001. The minister estimated the total cost of a second GSM network at close to US$100 million.
MTS and Saudi Oger said they were ready to invest more than US$ 200 million into the development of Belarussian telecommunications, while the North-Western GSM offered a smaller amount of US$70 million.
Belarus with a population of 10 million people currently has two carriers—Belcel and Velcom with 18,000 and 60,000 subscribers respectively.
