MOSCOW, Russia-Mobile TeleSystems, the largest mobile-phone operator in Russia, acquired a 51-percent stake in Barash Communications Technologies Inc., a U.S. company that is the leading wireless carrier in the central Asian country of Turkmenistan.
MTS bought the controlling stake in BCTI, incorporated in the United States, from the founders of the company for $28.05 million with an agreement to increase its ownership to 100 percent within the next eight months, subject to certain conditions. The price of the remaining 49-percent stake will depend on the operating and financial performance of the company, but will not exceed $26.95 million.
BCTI’s branch in Turkmenistan holds GSM-900 and AMPS licenses for the entire territory of the country. Mobile penetration in Turkmenistan is less than 1 percent, and fixed-line penetration is estimated at around 6 percent, according to the World Fact Book of the Central Intelligence Agency. At the beginning of June, the company provided services to 59,100 mobile subscribers and is the leader of the two GSM providers in the country with 97-percent market share. The network is based on Siemens AG equipment.
In 2004, BCTI’s revenues totaled $12 million. Average monthly revenue per user for 2004 was about $31. The company does not have any debt, according to CBTI.
“MTS’ entry into the Turkmen market is a significant step in implementing our strategy of geographical expansion into neighboring countries with high growth potential for the mobile industry. The experience we have gained in developing modern telecommunications infrastructure and providing first-rate services will be fully utilized in Turkmenistan,” said Vassily Sidorov, president and chief executive officer of MTS.
