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MOSCOW, December 11 (Itar-Tass) - Deputy Prime Minister Arkady Dvorkovich has signed a directive for state representatives on Rostelecom’s board approving separation of the state operator’s mobile assets and their merger with Tele2 Russia for a joint venture, PM’s spokeswoman Alia Samigullina told Itar-Tass.
The Federal Agency for State Property Management, Rosimushchestvo, has settled its dispute with the board.
“There are certain mechanisms that can allow the state to secure its interests via the shareholders’ agreement when it has no direct control [in the JV with Tele2 - Ed.],” the head of Rosimushchestvo, Olga Dergunova, told Itar-Tass. She added the deal was adjusted with the help of these mechanisms and documents were being prepared for the government’s approval.
Rostelecom’s board was initially planning to consider the merger on November 20, but the issue was removed from the agenda as state proxies had not received the government’s directive. According to the Kommersant daily, on November 18 Dergunova sent Dvorkovich a letter requesting a separate discussion of the planned merger’s impact on the government’s plans to privatize Rostelecom. The letter said the lack of state control of the operator and the possibility of bringing the interest up to the controlling stake might reduce the selling price of the state stake in Rostelecom.
Under Rostelecom’s new strategy, the JV, where it will hold less than 50 percent, is going to acquire a market share of no less than 25 percent by 2018. The JV is planned to provide mobile services in 83 regions, including Moscow. According to the business model outlined in the document, the merged company’s revenue will add an average of 15 percent a year to reach 212 billion roubles ($6.4 billion) in 2018, while EBITDA and EBITDA margin will be 73 billion roubles ($2 billion) and 35 percent respectively. The new operator is to increase the subscriber base to 56 million and thus take up 23 percent of the market. The average revenue per user (ARPU) is expected at 328 roubles (almost $10) a month, forecast to increase by 6 percent on average until 2018.
Rostelecom is a federal telecommunication operator providing wire and wireless communication. Last year the operator reported IFRS revenue of 321 billion roubles ($9.7 billion) and a net profit of 34.5 billion roubles ($1 billion).
Meanwhile, Tele2 has been operating in Russia since 2003 in 42 regions taking up about 10 percent of the mobile market. In 2012 Tele2 Russia posted a net revenue of $1.99 billion and EBITDA of $730 million. Last March Tele2 was acquired by VTB Group from the Swedish Tele2 Holding AB. On October 17 VTB sold its 50 percent stake in Tele2 to bank Rossiya and Aleksey Mordashov’s companies.