AUG. 31 2016 (The Conway Bulletin) — Kcell and Beeline, two of the largest mobile operators in Kazakhstan, signed a network sharing agreement that will allow their users to access 4G/LTE services across the country. Kazakhstan liberalised access to the 4G network earlier this year. Swedish Telia Company controls Kcell, while Russia’s VimpelCom owns Beeline.
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(News report from Issue No. 294, published on Sept. 2 2016)
AUG. 5 2016 (The Conway Bulletin) — Russian mobile phone operator MTS, which is listed on the New York stock exchange, said it had sold its business in Uzbekistan to the Uzbek government. The US authorities have been investigating alleged corruption at MTS’s Uzbek operations. MTS owned a 50% stake in UMS, the country’s third largest mobile operator. Various governments have launched a series of investigations into corruption by mobile operators in Uzbekistan.
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(News report from Issue No. 292, published on Aug. 12 2016)
JULY 25 2016 (The Conway Bulletin) — The Uzbek government extended the telecoms licence for Beeline Uzbekistan until 2031. Beeline Uzbekistan said the extension of the licence was a key step for one of the company’s most important markets. Beeline Uzbekistan is a subsidiary of Amsterdam-based Russian telecoms company VimpelCom. In the past few months, VimpelCom has been fined millions of dollars for paying bribes to enter the Uzbek mobile market.
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(News report from Issue No. 291, published on Aug. 1 2016)
JULY 20 2016 (The Conway Bulletin) — A court in Amsterdam ordered the seizure of €123m ($135m) of assets linked to Gulnara Karimova, the eldest daughter of Uzbek president Islam Karimov, as part of an ongoing global investigation into bribes paid by major telecoms firms looking to enter the Uzbek market.
Gibraltar-registered Takilant, the company linked to Ms Karimova that took bribes to award telecoms licences in Uzbekistan, had its assets frozen in Sweden in 2012/13 in a related court case but this is the first time a Western court has directly confiscated them.
The Dutch ruling targeted cash that Amsterdam-based Russian telecoms operator VimpelCom and Sweden’s Telia Company paid Takilant between 2004 and 2013.
In its decision, the court said that Takilant demonstrated “a way of doing business that is socially extremely destabilising.”
The latest ruling aggravates a corruption scandal that has sunk Uzbekistan’s already weak reputation as a place for Western businesses to operate.
It also deals another blow to Ms Karimova’s profile in Uzbekistan, where the self-styled fashion designer and diplomat was once touted as a potential president. She has been under house arrest in Tashkent for two years and her associates are in prison for various financial crimes.
With the confiscation of Takilant’s assets, the courts start to close in on reclaiming some of the millions of dollars paid to Ms Karimova. Previously, courts had only managed to fine European telecoms companies for their illegal practices.
In February, a US court ruled that VimpelCom, listed on the New York Stock Exchange, was guilty of bribing Takilant and fined it $795m. Another US prosecutor is currently trying to freeze $550m of Takilant’s assets.
Sweden’s Telia has also said at it has put aside millions of dollars to pay fines linked to bribery charges.
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(News report from Issue No. 290, published on July 22 2016)
ALMATY, JULY 20 2016 (The Conway Bulletin) — Kcell, Kazakhstan’s largest mobile operator, said Q2 revenues were 15.3% lower than last year because of weak economic conditions and aggressive competition which have driven down prices.
Kcell’s Q2 revenues of 36.4b tenge ($107.7m) represented a slight improvement over the previous quarter, when it posted 35.6b tenge ($107), its worst quarter since an IPO in 2012. Importantly, however, Kcell said that its subscriber base is holding up through an economic downturn.
“In the second quarter we started to see some stabilisation in market prices and subscriber numbers,” the company’s CEO Arti Ots said in a statement.
Increased competition and the depreciation of the tenge currency against the US dollar over the past year have knocked revenues for mobile operators in Kazakhstan.
In April 2016, revenues for all mobile companies in Kazakhstan were down by 21% to 68b tenge ($204m) compared to the same period last year, according to government data.
Sweden’s Telia Company owns a 62% stake in Kcell. It has said that it wants to sell this stake because of reputational damage caused by a corruption probe into bribes it paid to enter the Uzbek market.
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(News report from Issue No. 290, published on July 22 2016)
JULY 12 2016 (The Conway Bulletin) — US and Germany-based telecoms network provider Coriant said it signed a deal with Turkmenistan’s ministry of communications to provide a new national backbone network for the country. The new network will connect all Turkmen cities and neighbouring countries. In the past, Coriant has also worked in Kazakhstan in partnership with Kazakhtelecom.
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(News report from Issue No. 289, published on July 15 2016)
JULY 14 2016 (The Conway Bulletin) — The EBRD said it had loaned $100m to MagtiCom, Georgia’s largest telecoms operator, to buy Caucasus Online, a Georgian internet service provider that also works in Armenia and Azerbaijan. MagtiCom, whose main shareholders are two American telecoms companies, has almost 2m subscribers.
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(News report from Issue No. 289, published on July 15 2016)
JULY 6 2016 (The Conway Bulletin) — Dutch prosecutors asked a court in Amsterdam to confiscate €300m ($333m) from Gibraltar-registered Takilant, a company linked to Gulnara Karimova, the eldest daughter of Uzbekistan’s president. Takilant allegedly received bribes in 2007/8 from Sweden’s Telia Company (then called TeliaSonera) and Russia’s VimpelCom to award mobile licenses in Uzbekistan. Dutch prosecutors asked the court to impose a €5m ($5.5) fine on Takilant and seize its 6% stake in Ucell, an Uzbek subsidiary of Telia Company. VimpelCom is registered in the Netherlands.
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(News report from Issue No. 288, published on July 8 2016)
ALMATY, JULY 4 2016 (The Conway Bulletin) — Aleksander Klebanov, one of Kazakhstan’s richest men, bought a 24.47% stake in Kazakhtelecom, the state-owned telecoms company, in a move to improve corporate governance ahead of a planned IPO in London.
Mr Klebanov’s Sobrio Ltd, a London-registered shelf company, bought shares from two companies officially owned by Aigul Nuriyeva, the 8th richest Kazakh according to Forbes. She was widely perceived as holding these companies on behalf of Mr Klebanov.
Wary of past corporate governance flops, Kazakhtelecom said the transfer of shares would improve transparency ahead of an IPO.
“The deal was conducted for Kazakhtelecom ownership structure optimisation and transparency purposes in preparation for a possible IPO,” the company said in a press release.
For two years, Kazakhtelecom has mulled over an IPO in London.
Samruk-Kazyna, Kazakhstan’s sovereign wealth fund, owns 52% of Kazakhtelecom. Earlier this year, Kazakhtelecom’s subsidiaryAltel merged with Tele2, a Swedish telecoms company, in an effort to boost its mobile profile.
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(News report from Issue No. 288, published on July 8 2016)
JUNE 27 2016 (The Conway Bulletin) – Russian telecoms operator MTS wants to sell its Uzbek assets, two anonymous sources from the company and the ministry of information told Interfax. The move follows other competitors, like Telia Company and VimpelCom, who are looking to divest from the country, after a corruption scandal hit the telecoms sector. MTS owns 50.01% of UMS, the Uzbek government owns the rest.
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(News report from Issue No. 287, published on July 1 2016)
