MTS is going to sell part of its business in Ukraine
Kiev, October 21 (PolitNavigator, Vasily Ablyazimov) – OJSC Mobile TeleSystems (MTS) is exploring the possibility of selling part of its Ukrainian company, Bloomberg writes today.
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Russia's largest mobile phone operator has hired a council of experts to find co-investors to continue developing the MTS network in Ukraine and may offer them a stake in the business, the publication reports, citing private sources. Negotiations are being kept secret for now.
MTS hopes to find co-investors to build a new telecommunications network, the so-called third generation network, and therefore plans to attract investments to share construction costs and reduce political risks. The construction of a third generation network in Ukraine will require large investments, of which license fees alone will take about 4 billion hryvnia ($308 million), the publication reports.
MTS, controlled by billionaire Vladimir Yevtushenkov, and VimpelCom Ltd. together own about 80% of the wireless communications market in Ukraine. The profit of MTS in Ukraine for 2013, without deductions for depreciation and amortization expenses, amounted to 20,6 billion rubles (about $500 million).
Dmitry Solodovnikov, a representative of Moscow MTS, confirmed that, despite the sale of part of the business, the operator does not plan to leave Ukraine, and is interested in developing its business there, including the construction of faster networks.
At the same time, the Ukrainian government is expressing plans to exclude Russian operators from planned 3G auctions due to geopolitical tensions, Cabinet Minister Ostap Semerak said last month.
MTS receives about 10 percent of its revenue from Ukraine. Based on sales results in August, the chain reported a decrease in its income due to the weakening of the Ukrainian currency.
MTS is planning to sell part of its business in Ukraine.