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MTS returns to Uzbekistan

September 24, 2014, 20:32 UTC+3

MTS will create a joint venture with Uzbekistan: the new company, Universal Mobile Systems, is planning to start providing mobile communication services in Uzbekistan from December 1, 2014

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© ITAR-TASS/Marina Lystseva

MOSCOW, September 24. /ITAR-TASS/. Russia’s cellular operator MTS is returning to Uzbekistan, the company said on Wednesday.

MTS will create a joint venture with Uzbekistan. The new company, Universal Mobile Systems (UMS), is planning to start providing mobile communication services in Uzbekistan from December 1, 2014.

Under the amicable settlement agreement with the Uzbek authorities, MTS has received 50.01% of shares in the joint venture, with 49.99% going to Uzbekistan’s state-controlled Centre of Radio Communication, Broadcasting and Television.

The joint venture will also use the assets that were previously owned by MTS’ subsidiary in Uzbekistan, Uzdunrobita.

It has 2G/3G/LTE licenses, a frequency range, a numbering capacity and other permits for operation as well as investment guarantees under Uzbek legislation.

MTS began to provide communication services in Uzbekistan in 2006 through Uzdunrobita. In the summer of 2012, law enforcement agencies suspected its top managers of theft and tax evasion.

MTS President Andrei Dubovskov accused Bekhzod Akhmedov, Director-General of MTS Uzbekistan, of unfair management, misuse of funds and embezzlement.

In April 2013, Uzdunrobita was declared bankrupt. Lawsuits followed, going to international courts. In the spring of 2014, MTS received an inquiry from the U.S. Justice Department which asked for information on the company’s operations in Uzbekistan.

MTS and the Uzbek authorities are planning to file a petition shortly with the World’s Bank’s International Centre for Settlement of Investment Disputes, asking it to terminate the arbitration proceedings.

The amicable settlement agreement is regulated by British law and requires all disputes to be examined by the International Court of Arbitration of the International Chamber of Commerce in Paris.

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