Tag Archives: telecoms

Telia asks Tajikistan for clarification

FEB. 28 2017 (The Conway Bulletin) — Swedish telecoms company Telia has asked the Tajik government for a face-to-face meeting to explain a tax investigation against its local subsidiary, Tcell, which has slowed its previously agreed sale to the Aga Khan Fund for Economic Development. Telia wants to sell its Central Asian subsidiaries after a corruption scandal in Uzbekistan damaged its reputation.

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(News report from Issue No. 319, published on March 3 2017)

Azercell dodges handing out data for 2016 performance

FEB. 22 2017 (The Conway Bulletin) — Azercell, the Azerbaijan-based subsidiary of Sweden’s Telia, appeared to dodge releasing meaningful numbers for its performance at its full year 2016 press event, instead issuing a statement that discussed its contribution to the Azerbaijani economy and its spending on social projects.

Since 2011, Azercell has published online its results but this year was different. There was no results page with a breakdown of how the company had performed. Instead, an unashamedly PR-esque statement extolled the company’s virtues.

Requests to the Azercell press department for the full year results went unanswered, adding to the impression that Azercell was trying to dodge releasing the data. Azerbaijan’s economy is under pressure at the moment and shrunk by an estimated 3.8% in 2016. A drop in oil prices and a recession in Russia has hurt the oil-backed economy badly and forced the currency to devalue by 50%.

There was a hint in Telia’s own full year results in January, that Azercell had had a tough 2016.

Telia said that net sales in reported currency from its Eurasian unit had fallen by 25% because Ncell in Nepal had been sold and because of “lower net sales in Azercell in Azerbaijan due to negative currency development.”

It then said earnings had dropped in 2016 partly because of “margin erosion in Azercell in Azerbaijan”.

Telia has been looking to sell its units in the Central Asia and South Caucasus region because of reputational damage inflicted by its Uzbek unit over a corruption scandal.

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(News report from Issue No. 318, published on Feb.24 2017)

Swiss private bank may have failed to stop Uzbek money laundering

FEB. 23 2017 (The Conway Bulletin) — Swiss prosecutors confirmed that they were investigating the private Geneva-based bank Lombard Odier for failing to prevent money laundering by Gulnara Karimova, the daughter of Uzbekistan’s former president Islam Karimov.

The investigation is the first time that a Western bank has been directly linked to a bribe-taking racket run by Ms Karimova. She took bribes worth hundreds of millions of dollars from telecoms companies looking to access the Uzbek market in 2007/8.

Lombard Odier is one of the oldest and most respected names in Swiss private banking and the investigation may signal the start of a deeper and wider probe into how Western banks have helped, or at least failed to stop, Ms Karimova’s money laundering. So far only the telecoms companies — Telia, Telenor and Vimpelcom — have had their links with Ms Karimova scrutinised.

“The investigations are being made on the basis of information revealed by criminal investigations … into allegations of money laundering involving suspects that include the daughter of the former president of Uzbekistan,” Reuters quoted Switzerland’s Office of the Attorney General as saying.

The probe had first been reported by the Bilanz magazine.

Ms Karimova has been under house arrest in Tashkent since 2014 and her closest associates have been jailed.

Lombard Odier also released a statement saying that it was cooperating with the investigation and that it had reported suspicious transactions to the Swiss authorities in 2012.

Before returning to Tashkent at the end of 2013, Ms Karimova had been based in Geneva as Uzbekistan’s ambassador to the UN. After Lombard Odier’s report of suspicious transactions in 2012, the Swiss authorities froze bank accounts linked to her which held 800m Swiss francs ($795m).

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(News report from Issue No. 318, published on Feb.24 2017)

Mobile subscriptions fall in Tajikistan

FEB. 10 2017 (The Conway Bulletin) — Mobile phone subscriptions in Tajikistan fell 22% in 2016 to 8.7m, the telecompaper.com website reported by quoting industry data. The drop is likely linked to the sharp economic downturn that has hit Tajikistan and its neighbours over the past couple of years. It relies heavily on Russia to power its economy but the Russian economy has tipped into a recession because of a fall in oil prices.

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(News report from Issue No. 316, published on Feb. 10 2017)

Telia CEO promises sale in Kazakh, Tajik, Uzbek markets

JAN. 27 2017 (The Conway Bulletin) — The CEO of Swedish mobile operator Telia, Johan Dennelind, said that he was confident that he would be able to sell off the company’s remaining assets in its Eurasia region this year. Interest in Telia’s regional asset which include Azercell, Geocell, Ucell, Kcell and Tcell have been light. A corruption scandal in Uzbekistan, linked to a 2008 bribe, triggered the sale.

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(News report from Issue No. 315, published on Feb. 3 2017)

Revenues at Kazakh mobile operator collapse as mobile users feel economic chill

ALMATY, JAN. 27 2017 (The Conway Bulletin) — Kcell, Kazakhstan’s biggest mobile operator, felt the full force of the regional economic slowdown in 2016 with revenues falling 12.7% to 147b tenge ($444m), its lowest since 2009.

Kcell’s annual reports are important because they provide one of the few open and accurate insights into how Kazakh companies are handling a sharp economic slowdown triggered by falling oil prices and a recession in Russia.

The company, which is part- owned by the Kazakh government and part-owned by Sweden’s Telia, also said that a drop in profit margin had reduced its overall profit by 41% to just over 31b tenge ($94.5m).

In a statement, Kcell CEO, Arti Ots, admitted that 2016 had been tough.

“2016 was extremely challenging for Kcell, although at the end of the year we saw early signs of market stabilisation,” he said.

“As we move into 2017, there are positive signs of economic recovery in Kazakhstan, with an easing in consumer price inflation and indications of growth in the economy.”

A collapse in the value of the tenge, economic stagnation, job losses and a fall in vital remittance values all hit the Kazakh economy in 2016.

The specific improvements that Mr Ots referenced include a boost to revenues from demand for contract phones which has fed through into a third consecutive quarter of revenue increase.

“We are now seeing a positive interconnect balance with revenue exceeding costs and we expect this situation to continue in 2017,” he said.

The details of Kcell’s financial results also reflect the turbulence of the Kazakh economy, including rising inflation. Kcell said that costs had risen by 19.2% in 2016 to nearly 11b tenge ($33.5m). A spokesperson for the company said that some of this cost increase was triggered by a rise in staffing costs at new outlets.

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(News report from Issue No. 314, published on Jan. 27 2017)

Kazakhstan not to regulate telecome prices

JAN. 18 2017 (The Conway Bulletin) — The authorities in Kazakhstan have decided not to dictate telecoms prices this year, the telecompaper.com website reported quoting Kazakh sources. The authorities had considered interfering in the competitive Kazakh market, which has been characterised by price drops. Telecompaper.com said that the decision would make Kazakh telecoms companies more competitive in the Eurasian Economic Union.

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(News report from Issue No. 313, published on Jan. 20 2017)

Kazakhstan not to regulate telecome prices

JAN. 18 2017 (The Conway Bulletin) — The authorities in Kazakhstan have decided not to dictate telecoms prices this year, the telecompaper.com website reported quoting Kazakh sources. The authorities had considered interfering in the competitive Kazakh market, which has been characterised by price drops. Telecompaper.com said that the decision would make Kazakh telecoms companies more competitive in the Eurasian Economic Union.

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(News report from Issue No. 313, published on Jan. 20 2017)

Sweden’s Telia accuses Tajikistan of slapping it with bogus tax bill

JAN. 17 2017 (The Conway Bulletin) — Telia Company, the Swedish telecoms company, accused the Tajik government of posting a bogus tax claim against its Tajikistan-based subsidiary Tcell.

In a statement, the head of Telia’s Eurasia division, Emil Nilsson, said that the tax authorities in Tajikistan had handed Tcell a claim for May 2015 to June 2016 of 155m somoni ($19.6m) — more than the company’s entire revenue for 2015.

“We are very concerned with the situation which we believe is totally unacceptable,” Mr Nilsson said.

Central Asia governments have previously tried to raise revenue by slapping large fines for tax violations on Western companies. And this is exactly what Telia, in its abrupt statement, said was the scenario currently playing out with the Tajik authorities.

“The Tajik operator Tcell has appealed what is considered to be an illegal tax claim,” it said in the statement entitled ‘Telia appeals illegal tax claims in Tajikistan’. “The authorities in Tajikistan are basing their tax claim on revenue that Tcell has never generated, so called ‘un- realised revenue’.”

The Tajik authorities may feel that Tcell is vulnerable. Telia is trying to offload its businesses in Central Asia and the South Caucasus after a corruption scandal in Uzbekistan was uncovered that tarnished Telia’s global image and damaged Central Asia’s reputation for governance.

In September 2016, Telia agreed to sell its 60% stake in Tcell to the Aga Khan for $39m. The Aga Khan already owns 40% of the company.

In its statement, Telia said that it had expected the deal to be signed off by the Tajik authorities by the end of 2016. This has been delayed, though, without clear reason, Telia said.

The Tajik authorities have not commented on either the tax-linked fine or the delay in granting permission for Aga Khan to buy Telia’s stake in Tcell.

Tajikistan’s economy has been hit hard by a recession in Russia, making finding potential buyers for Tcell difficult.

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(News report from Issue No. 313, published on Jan. 20 2017)

MTS revenues in Armenia and Turkmenistan drop

NOV. 18 2016 (The Conway Bulletin) — Russian telecoms company MTS published its first quarterly report after discontinuing operations in Uzbekistan, posting a 1.3% decline in revenues in Q3 across its operations in the former Soviet Union, compared to the same period last year. In rouble terms, revenues in Armenia were down 19% to 2.1b roubles and in Turkmenistan they fell by 17% to 1.2b roubles.

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(News report from Issue No. 306, published on Nov. 25 2016)