Nordic telecoms operator TeliaSonera late on Monday opened the door to resolve its controversial deal for a stake in Turkcell, but said it would take a “significant sum” to break the long-standing deadlock.
Earlier this year, the International Chamber of Commerce found TeliaSonera’s 2005 agreement with Cukurova to buy a 27 percent stake in Turkey’s leading mobile operator, Turkcell, for $3.1 billion was binding, and that the Turkish conglomerate was obliged to work to close the deal.
Cukurova later sold half that stake in Turkcell to Altimo, the telecoms arm of Russian billionaire businessman Mikhail Fridman’s Alfa Group.
Kim Ignatius, TeliaSonera’s acting chief executive, said it was quite clear Cukurova could not give TeliaSonera all the shares agreed on in the 2005 deal, and that the two sides would have to agree on some kind of financial compensation.
“If the payment is significant, this could open an opportunity for some kind of larger agreement,” Kim Ignatius,
“I would like to stress the words ‘could open an opportunity’,” he said, but declined to elaborate.
Turkcell has a market share of about 60 percent in fast- growing European Union candidate Turkey, but faces increasing competition from Vodafone Group Plc and Avea. It also has assets in other growth markets in the region.
Ignatius, in charge until new CEO Lars Nyberg starts next week, said he did not expect rival Altimo could in any way get a controlling stake in Turkcell.
In April, Altimo said it had opened a court case against Cukurova because of contract breaches. It had said the court case could result in the seizure of Cukurova’s stake in Turkcell, which Cukurova denied.
TeliaSonera has been pushing for years to expand beyond its Nordic home market and last month it bought U.S.-based MCT Corp — with stakes in mobile operators in Uzbekistan, Tajikistan and Afghanistan — for about 2 billion Swedish crowns ($292 million).
“These are quite risky investments, but these are clearly also growth markets,” Ignatius said. ($1=6.854 Swedish Crown)