President of MTS mobile operator Mikhail Smirnov is interviewed at the MTS stands during the Communications Expocom 2004 exhibition. The event took place in the Moscow Expo Centre.
Photo: Dmitry Lebedev
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Renova Creates Media-Holding
// telecommunications
Renova Group announced its intention to create Renova-Media Holding yesterday. A major Internet-company Komkor is to make up the holding, beside Renova’s media assets. Renova representatives believe the cost of joint assets may reach $2.5 billion in 2 years. Experts predict that some legal problems will get in the way of creating the holding. For instance, Moscow government claims back one of the key companies for the holding—cable operator Teleinform.
Renova-Media Holding will provide telephony services, wide-band Internet access, and pay TV. The holding will unite media and telecommunications assets of Renova: 60 percent of US company Moscow Cablecom (which owns 100 percent of shares of Moscow operator Komkor-TV), 50 percent of Belarus cable operator Kosmos-TV, and 100 percent of Teleinform. Renova will own about 51 percent of shares in the holding. Mikhail Smirnov, former director general of cellular operator company MTS, now director of Moscow Cablecom, will head the holding.
Renova-Media will be serving nearly 500,000 subscribers. Its turnover should be $90 million a year, according to the estimations of J’Son & Partners. The holding’s assets will cost between $350 million and $400 million. Renova spokesman Andrey Shtorkh yesterday announced plans to raise Renova-Media Holding’s market cap up to $2.5 billion by 2008.
Experts note, however, that another telecommunications asset of Renova—Korbina Telekom—was not included into the holding. According to Andrey Shtorkh, the shareholders considered it unnecessary at this stage, because Renova does not own the controlling stock of Korbina. Besides, Korbina and Komkor work in different sectors of the market, so they can develop without hindering each other.
Analysts believe the unification of Komkor and Renova’s media assets will prove to be effective. Renova-Media Holding will receive a highway network 16,000 km long, which provides great opportunities for subscriber access.
Among the risks connected with the creation of the holding, experts point out the uncertain legal status of cable operator Teleinform, a constituant of the future holding. Early in 2006, Renova bought Teleinform from a group of private investors. Yet, about 2 months later, Moscow city government announced their intention to contest the transaction. They claim that Teleinform owners had no right to sell it, but should have passed it to the city of Moscow according to the agreement of 1994. Moscow City Prosecutions Department probes into the deal now. Experts say that should Teleinform be taken away from the holding, Renova-Media will suffer serious losses and return to its starting position.
Valery Kodachigov
All the Article in Russian as of June 06, 2006
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