Monthly Archives: September 2003

Turn Up the Signal

The current undefined situation on the telecom market will only improve once Svyazinvest goes private.

Elena Rytsareva

Just two months ago, Russian telecom was a steadily growing industry with little of interest for scandal-hungry journalists. The market’s three major players, Alfa Group, AFK Sistema, and the so-called “Petersburg contingent” and their Scandinavian partners at TeliaSonera, had a firm hold on their assets. The most important direction for further development appeared to be regional Russia and the CIS countries. Now, however, things have changed dramatically.

On August 5th, Alfa Group, which owns the blocking stake in Vympelkom (the Bee-Line network), the second biggest mobile company in Russia, purchased 25.1% of the shares in Megafon, Russia’s third biggest cellular company owned by the Petersburg contingent. Since that day, chaos has taken over Russian telecom. The assets of the companies generating over half the revenue in the industry–Vympelkom, Megafon, and the partially state-owned holding in fixed communications Svyazinvest–are now in limbo. The conflict, centered on the standoff between the Petersburg group, headed by Minister of Communications Leonid Reiman, and Alfa Group, grows with each passing day.

Megafon under the gun

When Alfa Group purchased the Megafon shares, it did so without informing the other shareholders, in particular Petersburg-based telecom holding Telekominvest and TeliaSonera. Market players and observers soon waited for a counterattack, in particular from Reiman, a big supporter of the Megafon project. But the reaction did not come right away, nor did it come from Reiman.

For almost an entire month, Alfa felt it had won. The Ministry of Anti-Monopoly Policy okayed the deal. So did Vympelkom’s board of directors, which Alfa controls with the Norwegian company Telenor. In late August, the board even announced that “the two parties will seek possible ways to merge Megafon and Vympelkom.”

Then, Alfa demanded an addition to the agenda of Megafon’s September 10th special shareholders meeting. Alfa wanted to discuss reducing the authority of the company’s board of directors and replacing the current general director, Sergei Soldatenkov, who hails from St. Petersburg. That’s when things first began to get nasty. Neither Telekominvest nor TeliaSonera came to the meeting. Then on September 15th, Ilya Yuzhanov, head of the Anti-Monopoly Ministry, made a strong statement about the potential merger of Vympelkom and Megafon: “In essence, Russia has only three nationwide cellular companies, MTS, Vympelkom, and Megafon. In a situation like this, to even theoretically consider the merger of two of the three companies is insanity.” According to Yuzhanov, even if such a merger took place, it would lead “to very serious consequences for the mobile communications market.” Leonid Reiman’s gentle threats to Alfa were even more artful. “If all the shareholders of both companies decide that merger is in their best interest, I don’t see any reasons why it shouldn’t happen,” he noted three days before Yuzhinov’s statement. “However, the optimum number of telecom companies for today’s market is three. If Vympelkom and Megafon merge and the market is left with two companies, we’ll need to introduce a third one.” The ministers both have a point. In other countries, three telecom companies have proven best for developing the cellular market. A duopoly does not allow much room to maneuver, as companies are either engaged in a price war or a price conspiracy. There is simply not enough room on the market for four.

For Alfa, as a financial investor, the Vympelkom-Megafon merger would be advantageous at least formally. The company would immediately get 47% of the Russian cellular market, becoming Russia’s biggest cellular company and beating out the current leader, MTS, which now controls 37% of the market. Now, Alfa can hold on to its Megafon stake for as long as it wants and carefully throw a wrench into the company’s works.
The Petersburg contingent appears at first glance to be in a much tougher situation. Megafon is their biggest cellular company. If Alfa tries to slow its development, their financial future will look grim. But that is merely at first glance. The Petersburg guys began to look for an ally and turned to AFK Sistema.

In search of an ally

With the division of power on today’s telecom market, Sistema is the undisputed leader in terms of assets. It controls companies through various ways and means with total revenues of more than $2.1 billion last year. This money comes to Sistema first and foremost from MTS, the leader on the Russian cellular market, earning $1.36 billion last year. Another half a billion dollars comes from companies operating traditional landlines in Moscow, Moscow Telephone Network and several others. Alfa, especially without Megafon, is far weaker on the telecom front. The companies it controls generated $1.05 billion in revenue last year, half of what Sistema earned. However, Sistema only has telecom assets, while Alfa is also rich in oil, metal, and food production assets. Thus, Alfa has several times more money to invest than Sistema.

The Petersburg gang earns most of its money from Megafon, $409 million last year. However, it took a lot of resources to get the company started. In all, the revenue of companies more or less connected to the St. Petersburg-based holding Telekominvest, barely exceeded $600 million last year. It would seem that that a company of this size shouldn’t mess with Alfa Group. But the Petersburg gang still has several strong arguments in their favor.

The new nationwide operator Reiman hinted at was no slip of the tongue. Rumors have been circulating to this effect for almost two years. It will not use the GSM standard, where the entire frequency range is practically taken, but the new cdma450 system which operates at the 450 MHz used by the old analogue NMT-450 system. The Petersburg contingent founded the GROS Company a year ago to set up just such a system. However, they couldn’t succeed in uniting the NMT-450 companies owned by Svyazinvest, Petersburg cellular companies, and independent investors. And now, a new contender, Skylink, has appeared on the market.

This company, with the participation of St. Petersburg-based Delta Telekom (controlled, naturally, by the Petersburg group), launched Russia’s first cdma450 network in December 2002. Early last year, part of the shares in the Moscow NMT-450 company, Moscow Cellular Communications, also ended up in the hands of the men from Petersburg. Here, they decided not to compete with the second biggest shareholder in the company, Moscow-based AFK Sistema, but to work together to promote the project. Judging by a variety of statements by Sistema representatives, this may not be the end of the two company’s collaboration.

Every road leads to Svyaztinvest

The current war being waged in the telecom industry appears to be a preliminary battle before the state sells its stake in Svyazinvest. This partially state-owned holding, despite its ever shrinking market share, is still the industry’s biggest asset. The market’s three big players dream of getting their hands on it. Svyazinvest controls the companies who inherited almost all of the Soviet-era ground lines.

25% minus two shares in Svyazinvest is scheduled to be privatized this year. This stake, however, won’t give its holder any control over the company and is therefore of little interest to investors.

Then suddenly a week ago, German Gref, Minister of Economic Development, announced that “Svyazinvest will not be privatized before 2005.” From the state’s point of view, this seems a fairly reasonable decision. Currently, only two companies have officially announced their intention to participate in the Svyazinvest auction, Alfa Group and AFK Sistema. A stake in Svyazinvest will make either of the companies into a monopoly that will ruin the market. If Sistema buys Svyazinvest, it will immediately control more than half the Russian telecom market. Alfa’s victory would also bode ill for Russian telecom. Alfa could combine Svyazinvest and Vympelkom into a universal operator and then try to sell the company to Western investors. The road to the UK, thanks to the recent BP deal, is already wide open. For the market to develop, Svyazinvest needs to go to an outside investor, someone as yet uninvolved in telecom. And this investor has yet to appear.

Gateway to Russia

Kilo ginčas dėl su “TeliaSonera” susijusios Rusijos mobiliojo ryšio operatorės valdymo

Dienraščio “Helsingin Sanomat” teigimu, kilo ginčas dėl Rusijos mobiliojo ryšio operatorės “MegaFon” valdymo. Nesutarimus dėl įmonės, kurios 44 proc. akcijų valdo Skandinavijos bendrovė “TeliaSonera”, artimiausiu metu spręs teismas.

Manoma, kad ginčas yra susijęs su kelių mobiliojo ryšio operatorių siekiu įsitvirtinti sparčiai augančioje Rusijos rinkoje. Bermudų salose registruota investicinė bendrovė “IPOC Capital Partners” (IPOC) ir Rusijos įmonė “Alfa” nesutaria, kuriai priklauso 25 proc. “MegaFon” akcijų. IPOC jau turi 6,5 proc. “MegaFon” akcijų paketą.

Kol kas Suomijos ir Švedijos “TeliaSonera” padėtį stebi ramiai. Bendrovės tarptautinio padalinio prezidentas Aimas Eloholma (Aimo Eloholma) minėjo, jog laikomasi neutralumo. Tačiau sklinda gandai, esą skandinavų neutralumas blėsta. Teigiama, jog “TeliaSonera” norėtų įkalbėti “Alfa” pakeisti ginčytinas savo “MegaFon” akcijas į paketą skandinavų valdomoje ryšio operatorėje “Fintur”.

“MegaFon” ketina artimiausiu metu pradėti savo akcijas listinguoti Londono ir Niujorko vertybinių popierių biržose. Tačiau nesutarimai dėl bendrovės valdymo gali šiuos planus atidėti.

Bet kuriuo atveju kova dėl “MegaFon” yra tik vienas mūšis didesniame kare dėl Rusijos mobiliojo ryšio rinkos. “Alfa” jau valdo nemenką paketą antroje pagal dydį Rusijos mobiliojo ryšio bendrovėje “Vimpelcom”, kurios akcijų dalis taip pat priklauso Norvegijos operatorei “Telenor”. “MegaFon” ir “Vimpelcom” yra ne tik aršios konkurentės, bet ir dažna rinkos gandų tema. Praėjusią savaitę Rusijos ryšių ministras Leonidas Reismanas pareiškė, esą niekas negali užkirsti kelio “MegaFon” ir “Vimpelcom” susiliejimui. Tačiau konkurencijos tarnybos tokią galimybę vertina kritiškai.

Ketvirtadienį nė vienas “LV Finance” Maskvos skyriuje dirbančių darbuotojų ginčo dėl “MegaFon” akcijų nekomentavo. Nesutarimai yra susiję ir su įtakingais Rusijos oligarchais, nes būtent jie yra įsteigę “LV Finance” ir “Alfą”.

Operatorių konkurenciją skatina sparčiai auganti Rusijos mobiliojo ryšio rinka. IPOC duomenimis, prieš šešerius metus Rusijoje tebuvo 500 tūkst. mobiliojo ryšio abonentų, o pernai jų skaičius išaugo iki 20 mln.

“MegaFon”, kuri yra trečia pagal dydį Rusijos mobiliojo ryšio operatorė, turi apie 5 mln. klientų. Per pirmąjį šių metų pusmetį bendrovė savo pagrindinei akcininkei “TeliaSonera” uždirbo beveik 20 mln. eurų.

ELTA

Was this equipment (ACB/ITSS) observed by other Countries where it is installed as a criminal subject?

Yerevan, 24-9-03
Dear Orlando,

 

Taking into consideration that our equipment was provided by Cibertec Technologies, please provide us with the following information to clarify some points.

 

  1. If this equipment can penetrate and cause damages in banking system of one subscriber (via DTMF connection)
  1. If this equipment has done such kind of operation in other Countries where it is installed?
  2. If this equipment was observed by other Countries where it is installed as a criminal subject?
  3. If there is the other country where this system was installed, there where kind of problems concerning personal data penetration?

Hereby we present you an article from Armenian newspaper which is writing that:

 

We can’t still confirm whether OTE are listening to us or not (tapping or not). But the fact that ArmenTel does non disdain to fix and record the data of personal character, violating by this the confidentiality of subscribers’ private life and together with this several international conventions, is already an inevitable fact.

This fact became known to our citizens during the lately open meeting. We remember that at the beginning Georgios Vasilakis, Acting CEO of the company refused to answer to the following question of David Harutiunyan whether ArmenTel is fixing combination of figures dialed by the subscriber after the telephone number. But after presenting to him document, which was confirming the fact of fixing the data, which could be added to confidential information by monitoring system of ArmenTel, G.Vasilakis unwillingly answered that such data is being fixed (though with other aim) and that OTE is working in Greece with the same principle.

We are planning to present to our readers the relation of political management of Greece toward this extremely important statement of the high official, assigned by OTE in ArmenTel in our coming newspaper issues. And now let’s say concretely what is tapped by ArmenTel.

Well, in civilized societies, including our, citizens are realizing numerous operations trough simply telephone apparatus. For example those who have automatic-answering machines very often being not at home call to their phone and by dialing relevant digital combination get informed about content of the left messages. In the same way one can turn on or off the signal in office in Yerevan, make transfers from his/her bank accounts (telephone banking) and etc.

 

It is clear, that any man who has remembered the dialing of your digital combination can without any difficulty repeat it, penetrating by this to your automatic answerer, to your house or office, to the system serving your bank account. In fact that combination of figures is fixed and recorded by ArmenTel as accidentally. It simply remains that an interested person gets access to these records. And once your bank can inform you that there is no money on your account, by information of your automatic answerer one can make date with your girlfriend instead of you, and after coming to your office in the morning, you can unexpectedly see that someone has been there earlier…

But, as we have already mentioned, such fortune can have any resident of Athens, as according to G.Vasilakis in Greece OTE is implementing similar technologies.

In order to clarify the opinion of Greece political management toward this we applied to Greek Embassy in Armenia. A young man who called himself as assistant to Ambassador, but refused to introduce himself, said that maybe only the very Ambassador of Greece In Armenia can to this question answer. And only under the condition if the question is formulated in a written form.

Taking into consideration that the theme touched by us is actual, we are intending to accept the conditions and to apply to Mr. Antonios Vlavianos, Ambassador of Greece in Armenia with a written inquiry. The answer of the letter (of course if we get it) will be published in the newspaper “Golos Armenii.

 

Thanks in advance

 

N.Papatheocharis from ArmenTel

TeliaSonera tired of being treated differently

Marie Ehrling, head TeliaSonera’s Swedish operations, is critical of the special treatment the company receives because it is the dominant player on the Swedish telecom market. Speaking at the Networks Telecom IT show, Ehrling said the Swedish telephony market was operating under competition and she saw no reason why TeliaSonera should continue to be penalised by competition authorities. She said current rules encourage companies to set up businesses that use TeliaSonera’s network instead of investing in new innovations.

Dagens Industri

MegaFon was created from small companies

Mobile operator MegaFon was established in Russia in August two years ago when regional operators from all around the country merged.

Sonera held 26 percent of MegaFon, and Telia’s direct and indirect ownership was 18 percent. The merged TeliaSonera is MegaFon’s largest shareholder with its holding of 44 percent.

MegaFon is Russia’s third largest mobile operator. The market leader is MTS, which is controlled by Deutsche Telekom. The number-two spot is held by Vimpelcom, a possible merger partner of MegaFon.

In July, MTS had nine million customers, Vimpelcom had eight million, and MegaFon 4.6 million. One week ago, MegaFon announced it had broken the five-million barrier. The number of MegaFon customers has grown by 67 percent this year.

MegaFon is profitable: its net sales in the second quarter of the year totalled 175 million euros, and its operating profit before depreciation and amortizations was 89 million euros.

The value of MegaFon has been estimated to be one billion dollars in rumours concerning the company’s listing at the New York Stock Exchange.

Helsingin Sanomat

TeliaSonera’s Russian associated company plagued by ownership dispute


By Annamari Sipilä in LondonRussian mobile operator MegaFon, of which TeliaSonera owns 44 percent, is the subject of an ownership dispute. The company’s ownership questions will soon be discussed in court.

 

Konkurencijos taryba pradėjo nagrinėti “TeliaSonera” prašymą padidinti “Omnitel” akcijų paketą

Konkurencijos taryba pradėjo nagrinėti Skandinavijos telekomunikacijų grupės “TeliaSonera” pranešimą apie ketinimą įsigyti per antrinę įmonę “Amber Mobile Teleholding AB” iki 90 procentų mobiliojo ryšio bendrovės “Omnitel” akcijų. Per mėnesį po skelbimo “Informaciniuose pranešimuose” Konkurencijos taryba turi priimti nutarimą, ar leidžia koncentraciją, ar pratęsia prašymo nagrinėjimą. Jis gali tęstis dar tris mėnesius. “Kai paprastesnis sandoris, tai yra buvę, kad ir per dvi savaites priimamas sprendimas. Kai sudėtingesnė situacija, dažniausiai nagrinėjimas būna ilgesnis nei mėnuo, bet nebūtinai maksimalus terminas”, – “Eltai” komentavo Konkurencijos tarybos koncentracijos skyriaus vedėjas Aleksandras Jakiūnas. Jo vertinimu, “TeliaSonera” ketinimas įsigyti “Omnitel” akcijas “iš esmės yra rimtas klausimas”, todėl jis neprognozavo, kada ir koks bus priimtas Konkurencijos tarybos sprendimas. Rugpjūčio pabaigoje “TeliaSonera” paskelbė susitarusi dėl “Motorola Lithuania Telecom” priklausančio UAB “Omnitel” 35 proc. akcijų paketo įsigijimo. “TeliaSonera” sutiko už akcijas sumokėti 117 mln. JAV dolerių. Po sandorio, jeigu jam pritars Konkurencijos taryba, skandinavų kompanija valdys 90 proc. “Omnitel” akcijų. Be “TeliaSonera” ir “Motorola” kompanijų, šiuo metu 10 proc. “Omnitel” akcijų turi J. Kazicko šeima. Konkurencijos taryba apie rugsėjo 2 dieną gautą “TeliaSonera” pranešimą dėl “Omnitel” akcijų paskelbė praėjusį penktadienį. Pasak A. Jakiūno, skelbiama tik tada, kai būna gauta visa informacija apie numatomą koncentraciją. “Omnitel” yra didžiausia Baltijos šalyse mobiliojo ryšio operatorė, birželio pabaigoje turėjusi 905 tūkst. klientų – 6,5 proc. daugiau nei praėjusių metų pabaigoje. Pagal klientus šiai bendrovei Lietuvoje priklauso apie 50 proc. mobiliojo ryšio rinkos. “Omnitel” apyvarta šių metų pirmąjį pusmetį siekė 371 mln. litų ir buvo 14 proc. didesnė, palyginti su analogišku praėjusių metų laikotarpiu. Pernai “Omnitel” apyvarta siekė 702 mln. litų. Pernai gruodžio pradžioje suformuota dviejų Skandinavijos valstybių valdoma telekomunikacijų bendrovė “TeliaSonera” per antrines įmones turi 60 proc. didžiausios šalyje ryšių bendrovės “Lietuvos telekomas” ir 55 proc. didžiausio mobiliojo ryšio operatoriaus “Omnitel” akcijų. Neseniai “TeliaSonera” viešai pareiškė, kad neplanuoja tas bendroves sujungti.
BNS
http://www.tv3.lt

“TeliaSonera” teigia neplanuojanti sujungti jos valdomų “Omnitel” ir “Lietuvos telekomo” bendrovių

Skandinavijos telekomunikacijų grupė “TeliaSonera” antradienį pareiškė neplanuojanti sujungti bendrovių “Omnitel” ir “Lietuvos telekomas”.

Be to, kaip nurodoma “TeliaSonera” pareiškime spaudai, toks bendrovių sujungimas nėra įmanomas, kadangi “Lietuvos telekomas” yra akcinė bendrovė, kurios akcijos yra kotiruojamos Lietuvos nacionalinėje vertybinių popierių biržoje.

Pernai gruodžio pradžioje suformuota dviejų Skandinavijos valstybių valdoma telekomunikacijų bendrovė “TeliaSonera” per antrines įmones turi 60 proc. didžiausios šalyje ryšių bendrovės “Lietuvos telekomas” ir 55 proc. didžiausio mobiliojo ryšio operatoriaus “Omnitel” akcijų.

“TeliaSonera” jau yra susitarusi dėl “Motorola Lithuania Telecom” priklausančio “Omnitel” 35 proc. akcijų paketo įsigijimo. Po šio sandorio skandinavų kompanija valdys 90 proc. “Omnitel” akcijų. “TeliaSonera” žadėjo pateikti pranešimą apie rinkos koncentraciją Konkurencijos tarybai, nuo kurios sprendimo ir priklausys sandorio užbaigimas. Kol kas toks prašymas nėra pateiktas.

ELTA

TeliaSonera AB – ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

“Lietuvos žinių” teigimu jau planuojamas “Lietuvos telekomo” bei “Omnitel” sujungimas

“Lietuvos žinių” šaltinių teigimu, jau svarstomi konkretūs planai sujungti didžiausias Lietuvos telekomunikacijų bendroves “Omnitel” ir “Lietuvos telekomą”.

Abi įmones valdo Skandinavijos bendrovė “TeliaSonera”. Tikėtina, kad jungtinei bendrovei vadovaus dabartinis “Hansabanko” valdybos pirmininkas Arūnas Šikšta. Neoficialiomis žiniomis, jis pirma turėtų tapti telekomo vadovu.

Pats A. Šikšta tvirtino nieko negirdėjęs apie “Omnitel” ir “Lietuvos telekomo” sujungimo planus, tačiau kaip verslininkas teigiamai vertintų telekomunikacijos bendrovių sujungimą.

ELTA

Minister Hits Out at GSM-Operator Merger

MOSCOW – Anti-Monopoly Minister Ilya Yuzhanov said Monday that allowing a merger between any two of Russia’s three largest GSM operators would be “sheer lunacy.”
Reports that rival operators Vimpelcom and Megafon might seek to merge their operations surfaced last month after Alfa Group, a major shareholder in No. 2 Vimpelcom, bought a 25.1 percent blocking stake in No. 3 Megafon.

“[We] will never approve a merger of two of the three national GSM operators,” Yuzhanov said without elaborating, according to Gazeta.ru.

Norwegian telecom Telenor, which like Alfa owns a blocking stake in Vimpelcom, seemed eager at the prospect of taking on top operator MTS via a tie-up between Vimpelcom and Megafon when its shareholders enthusiastically approved Alfa’s acquisition of the Megafon stake.

However, Megafon’s major shareholders, Finnish-Swedish TeliaSonera and St. Petersburg-based Telecominvest, were less enthusiastic about a major competitor coming on board, saying they disapproved of Alfa’s acquisition of Megafon stakeholder CT Mobile.

TeliaSonera and Telecominvest own 35.6 percent and 31.3 percent of Megafon, respectively.

Yuzhanov’s remarks were in sharp contrast to those of Communications Minister Leonid Reiman, a former Telecominvest executive who said last week that he saw no barriers to a merger. He qualified the remark by saying a third national operator would need to be introduced to keep the fast-growing sector competitive.

TeliaSonera, Telecominvest and Megafon all declined to comment, and Alfa’s telecommunications wing, Alfa Eko, could not be reached.

Analysts said it was far from certain if Alfa indeed is pushing for a merger, suggesting that instead the company may have bought the Megafon stake as a barganing chip for when the government decides to sell another chunk of state telecoms holding Svyazinvest.

The state’s 75 percent stake in Svyazinvest is listed on the official privatization plan for this year, but Economic Development and Trade Minister German Gref said Monday that the government would not sell any of its remaining shares in the company until 2005 at the earliest.

“First we need to settle the fate of Svyazinvest and the process of restructuring. Right now this isn’t a very lucrative deal for Russia and it is not very attractive to investors,” news agencies quoted him as saying. “We should spend 2004 deciding Svyazinvest’s ultimate fate.”

By Simon Ostrovsky
The St. Petersburg Times