MOSCOW—The biggest Russian carrier Mobile Telesystems (MTS) has reportedly reached a deal to buy a controlling interest in the fourth-biggest regional carrier, Kuban GSM, in the southern Krasnodar region with 316,000 subscribers.
“The shareholders of Kuban GSM passed the final decision to sell the controlling stake to Mobile Telesystems,” Leonid Mayevsky, chairman of the parliamentary subcommittee on communications, told the Vedomosti newspaper.
Vladimir Gorbachev, head of Kubanelektrosvyaz, which holds a 24-percent stake in Kuban GSM, said the deal was likely to be officially completed in December or January. Other Kuban GSM shareholders include Kubtelecom (54 percent), private individuals (20 percent) and Sochitelecom (2 percent).
The cost of the deal was not disclosed, however, mobile market experts estimate it at more than US$70 million. They also explained MTS’ hasty plans to place euro bonds worth US$250 million in December to get additional funds to buy Kuban GSM and possibly SMARTS carrier on the Volga (see related news).
MTS so far has refused comment.
The purchase of Kuban GSM was the only way for MTS to access the Krasnodar market, where GSM licenses are owned by the pan-Russian Megafon project of St. Petersburg-based Telecominvest holding and Vimpelcom (BeeLine). The latter also vied to buy Kuban GSM, but will now have to build out its network practically from zero. Kuban GSM, in its turn, looked for a partner after it faced competition from Megafon, which succeeded in attracting 50,000 clients in Northern Caucasus, including 7,000 in Krasnodar, in only several months of operation.
MTS’ ambitious expansion plans were backed this month by the arrival of the carrier to the second-biggest Russian city of St. Petersburg, where it launched its network into commercial operation on 5 December. MTS got a license in the region by purchasing the local Telecom XXI carrier for US$50 million.
Its major competitor, BeeLine, also is eyeing the St. Petersburg market and is vying for a third GSM license there.
