Tag Archives: telecoms

TeliaSonera wants to quit Central Asia and the South Caucasus

ALMATY, SEPT. 17 2015 (The Conway Bulletin) — Dogged by various corruption allegations against its businesses in Central Asia, Swedish-based TeliaSonera said it wanted to quit the Eurasian telecoms market to focus on European operations.

In the medium-term, TeliaSonera’s assets in the growing mobile telecoms markets of Central Asia and South Caucasus region could represent an attractive business for companies looking to enter the market. TeliaSonera owns stakes in telecoms companies in Azerbaijan, Georgia, Kazakhstan, Tajikistan and Uzbekistan. These are Azercell, Geo-cell, KcellP, Tcell and Ucell.

In most of these countries, TeliaSonera has been under the spotlight for its opaque corporate governance, an issue that its CEO, Johan Dennelind, referenced.

“Thanks to two years of hard work to improve the Eurasian operations, not least from a corporate governance and sustainability perspective, we now have better and more well-managed companies which we believe others can successfully develop further,” a TeliaSonera press release quoted him as saying.

TeliaSonera appointed Mr Dennelind as CEO in 2013 after a corruption probe into its operations in Uzbekistan forced the previous CEO and most of the directors to resign.

In the past two years, Swedish prosecutors have opened investigations into alleged bribes that the company paid to secure access to mobile networks and licences in Kazakhstan and Uzbekistan. More recently, in May 2015, a Swedish newspaper reported on another possible case of bribery in Azerbaijan.

In 2013, TeliaSonera sacked Tero Kivisaari, a senior executive, for paying $350m a few years earlier to a Gibraltar company linked to Gulnara Karimova, daughter of Uzbekistan’s President Islam Karimov, in exchange for a 3G licence. TeliaSonera owns 94% of Ucell, an Uzbekistan-based, mobile operator.

A 2013 deal that saw Kcell, in which TeliaSonera owns a 62% stake, pay Kazakh PM Karim Massimov $200m for network access has also come under scrutiny.

Analysts said that the pressure had been building on TeliaSonera and that they had been expecting TeliaSonera to cut its losses in its Eurasia division for some time.

Bakytzhan Khochshanov, an analyst at Halyk Finance, said that he thought a Russian or Turkish telecoms company might be interested in buying TeliaSonera’s stakes.

“Potential buyers are likely to be the largest ones, and among them either Megafon or MTS, as Vimpelcom already has an exposure to Kazakhstan’s market with its Beeline brand,” he said.

“Among the other potential bidders could also be Turkish operators, with Turkcell already having a stake in Kcell through Fintur Holding.”

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

LG to handle Uzbekistan’s database

SEPT. 14 2015 (The Conway Bulletin) — LG CNS, a Korea-based global IT service provider and subsidiary of LG, signed an agreement with the Uzbek government to manage its various databases. The parties have created the joint venture, LG CNS Uzbekistan. CEO Kim Daehoon said he wanted to use the joint-venture to pursue more government-orientated projects in Central Asia.

ENDS

(News report from Issue No. 248, published on Sept. 18 2015)

Armenia buys French telecoms company

JULY 21 2015 (The Conway Bulletin) – French telecoms company Orange is considering selling its Armenian subsidiary to Ucom, an Armenian fibre optic cable. Orange has been operating in Armenia since 2009 and has 650,000 subscribers.

ENDS

(News report from Issue No. 241, published on July 23 2015)

Kazakhstan’s mobile operator faces fall in profits

JULY 17 2015 (The Conway Bulletin) – Net profit at KCell, Kazakhstan’s largest mobile operator, dropped by 23.6% in Jan-June compared to the same period in 2014 because of aggressive price competition, the company said.

A few days later, on July 21, Kazakhstan’s state monopolies committee also ordered KCell, owned by Sweden and Finland based Telia-Sonera, to return around 1.5b tenge ($800m) to its customers for overcharging, more evidence that mobile charges in Kazakhstan are falling sharply.

KCell CEO Arti Ots said: “Further intensification of competition, with notably aggressive pricing, has impacted our results for the second quarter of 2015.”

KCell’s competitors Tele2, also based in Sweden, also blamed a price war in Kazakhstan for lower-than-hoped for profits. Mats Granryd, the company’s CEO, said that prices in Kazakhstan are falling sharply.

“Kazakhstan is turning into a real bloodbath when it comes to pricing,” he told Reuters in an interview.

Mobile companies operating in Kazakhstan are competing to lower prices, in an effort to grab market share.

And the conse- quences of these pricing policies are filtering through. In earnings reports, both KCell and Tele2 said they have not been profitable in Kazakhstan in 2015.

Specifically, Kcell said that its sales in H1 2015 were down by 6.6% on the same period in 2014. It also said that service revenue dropped by 12.3%.

ENDS

(News report from Issue No. 241, published on July 23 2015)

Kazakh telecom plans IPO in London

JUNE 18 2015 (The Conway Bulletin) – Kaztelecom, Kazakhstan’s stateowned fixed line telecoms company, plans to launch an IPO in London, its CEO Kuanyshbek Yessekeyev, said in an interview to the KazTag news agency. If the IPO does progress, and Mr Yessekeyev didn’t give a timeframe, it will attract much interest.

ENDS

(News report from Issue No. 236, published on June 18 2015)

TeliaSonera is transparent in Azerbaijan

MAY 28 2015 (The Conway Bulletin) – TeliaSonera, Sweden’s biggest mobile phone operator, said it has been open and transparent about the way it bought a stake in Azerbaijan’s Azercell in 2008. It made the statement after TV stations reported that it bought the stake from the Azerbaijani government for $180m, far less than the estimated market value.

ENDS

(News report from Issue No. 233, published on May 28 2015)

Kazakh mobile operator income drops in Q1

APRIL 21 2015 (The Conway Bulletin) – Kcell, Kazakhstan’s largest mobile operator, said that Q1 income had fallen by 15% and its customer based had dropped by 3% because of an increase in competition.

Strikingly, Kcell’s CEO Arti Ots didn’t make an reference to the general economic downturn that has hit Kazakhstan in his comments on the Q1 results. This is important because most consumer orientated businesses in Kazakhstan have reported a drop in sales over the past few months.

“In the first quarter of 2015 we have seen continued growth in data services and increased revenue from handset sales driven by demand for smartphones,” he said. “Voice revenues have declined in the face of intensifying competitive pressure.”

Kcell is listed on the London stock exchange but controlled by TeliaSonera, a Nordic company.

ENDS

(News report from Issue No. 228, published on April 22 2015)

Turkmenistan created new telecom company

APRIL 21 2015 (The Conway Bulletin) – Turkmenistan’s Ministry of Communications and its subsidiary, Turkmen Telecom, have created a new telecoms company called Ashgabat Shaher Telefon Ulgamy (ASTU).

ASTU, which means Ashgabat Urban Telephone Network, is tasked with improving the efficiency of the network and appears to be a part of Turkmenistan’s strategy to boost its telecoms networks.

“High-quality communication services, as well as high-speed channels to connect to broadband Internet and data transmission are ensured,” media quoted the government owned Neutral Turkmenistan newspaper as saying.

“Laying of transnational fibre-optic communication lines continues with the aim of expanding the interstate telephone traffic.”

The government-approved press release on the creation of the new company was the only information available.

Last month, the government also approved an ambitious plan to construct a fibre- optic line between the Caspian port of Turkmenbashi and Baku, Azerbaijan.

ENDS

(News report from Issue No. 228, published on April 22 2015)

Tajikistan raises taxes on mobile phones

APRIL 2 2015 (The Conway Bulletin) – Tajikistan has raised tax on mobile phone connections to 5% from 3%, an industry website reported. Reports said that the increase in tax will force mobile phone companies to pass on the extra cost to their consumers, pushing up inflation across the country.
ENDS

(News report from Issue No. 226, published on April 8 2015)

Corruption alleged in Uzbek telecoms

JAN. 17 2015 (The Conway Bulletin) — An anonymous whistle-blower in Norway has alleged corruption at Vimpelcom, a telecoms company a third owned by Norwegian Telenor, media reported. Telenor and Vimpelcom deny the allegations. Uzbekistan’s telecoms sector is already mired in an alleged corruption case.
ENDS

(News report from Issue No. 215, published on Jan. 21 2015)