Russia’s cellular giant MTS announced Friday the entry into Armenia’s market.
Photo: Alexandr Yalovoy
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MTS Leads in Armenia
Russia’s cellular giant MTS announced Friday the entry into Armenia’s market. For this purpose, MTS paid ˆ310 million to buy out 80 percent in the country’s biggest operator K-Telecom. The analysts say MTS managed to acquire the promising asset, having benefited from support of Armenia’s leadership.
According to press release of MTS, it paid ˆ310 million to buy out 80 percent in the stock capital of Armenia’s K-Telecom (VivaCell brand) from International Cell Holding. MTS also sealed an option with Cell Holding to acquire the remaining 20 percent and undertook to pay to it ˆ50 million over three years, provided the stipulated revenues and efficiency of the operator are attained. Besides, MTS will loan ˆ140 million to K-Telecom to refinance current liabilities of the operator, which amount is a top secret so far.
K-Telecom is Armenia’s biggest cellular operator with April 1 subscriber base of 986,000, which corresponded to the market share of 66 percent. 2006 revenues stood at $104.1 million, OIBDA was $57.8 million, OIBDA margin – 54.4 percent, ARPU - $15.62.
As K-Telecom owners had refused to sell till the very last moment, the deal triggered lots of rumors. An anonymous source with Sistema said MTS clinched a strategic partnership agreement with Armenia's authorities and undertook to promote tourism, bank and health care businesses in that country. Sistema CEO Alexander Goncharuk refused to comment on the suppositions. “I don’t think we’ve bought cheap K-Telecom, it’s the adequate price for the asset, which MTS top management succeeded to agree on,” Goncharuk said.
www.kommersant.com
All the Article in Russian as of Sep. 17, 2007
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