ST. PETERSBURG, Russia—Swedish company Tele 2 denied plans to sell the St. Petersburg-based FORA Communications AMPS carrier, which combines operators St. Petersburg Telecom and Oblcom.
“We are not going to sell FORA. On the contrary, we are planning to develop it and create a third GSM network in St. Petersburg on its basis. We view the company as a major investment object,” said Johnny Svedberg, Tele 2 executive vice president.
“With time, all our Russian subsidiaries, including FORA Communications, will operate under the Tele 2 trademark,” he added.
Last year, Tele2 purchased the Russian assets of Millicom International Cellular (MIC), which included 11 AMPS carriers and the Moscow Cellular Communications (MCC) NMT 450 MHz carrier. Tele 2 paid US$80 million for the assets and promised another US$30 million after the AMPS carriers, which have to abandon their spectrum according to an agreement with the Communications Ministry, received GSM 1800 MHz licenses
So far, only FORA has not received a license, but Yuri Dombrovsky, Tele 2 Russian office chief, said it is likely to happen in a couple of months.
The network, with a capacity of 100,000 clients, is to be launched six to seven months after the license is issued. Tele 2 is currently selecting an equipment vendor among Siemens, Ericsson, and Chinese companies Huawei and ZTE.
Last year, Russian media reported that Vimpelcom (BeeLine), which was vying for a third GSM license in St. Petersburg, was negotiating the purchase of FORA to expand into the second-biggest Russian city, where its major competitors Mobile TeleSystems (MTS) and Megafon already operate. The talks failed completely after Tele 2 bought MIC’s assets in Russia.
Now Vimpelcom has to look for a fourth GSM license in St. Petersburg, which markets experts believe is quite possible. According to Russian Communications Minister Leonid Reiman, a fourth GSM license can be issued if the penetration level is 18 percent to 20 percent. St. Petersburg currently counts 1.1 million mobile-phone users, which equals a penetration level of 24 percent.
