26 Mar 2019 13:56

Whether to keep Tele2 brand after Rostelecom's buyout of it still being discussed - head of Tele2

YEKATERINBURG. March 26 (Interfax) - The issue of whether or not to keep the Tele2 brand following the closing of a deal on its 100% acquisition by Rostelecom (RTKM) has still not been decided, the head of Tele2 Russia, Sergei Emdin, told journalists in Yekaterinburg on Tuesday.

"We've invested a lot in the Tele2 brand. We'd like to keep it on the market, since people know it, understand it, and love it. But this brand came to us from the former Swedish shareholders. [...] I won't comment directly what will happen with it, but this isn't connected to the deal with Rostelecom. We'd like to leave it [on the market], but talks on this issue with our Swedish colleagues are coming up," Emdin said.

He said that the deal itself could be closed within the next several months.

"The deal is being discussed, many details of detail have already been coordinated. But you have to understand that this is a long process, it won't be completed in a week or a month. I think it will be closed within a few months," Emdin said.

He did not specify the sum of the deal, saying that this issue is up to shareholders, and that Tele2 prefers to "focus on the operating business."

Emdin also said that Tele2 will remain an independent company after the deal.

"We have a huge number of integration processes. We're doing a lot today in the technical dimension as far as synergies that make economic sense. Deeper integration will come next, but the company will remain independent, we'll be working as before in the mass segment. Among other things, new projects coming thanks to close cooperation with the parent company. It's no secret that there'll be a project to build a professional mobile network based on LTE-450 technologies using towers. The bottom line is that we're remaining a separate company but will be working closely with Rostelecom on issues where it's beneficial to," he said.

According to Emdin, a major company is now being created in the Russian telecommunications market with a turnover of 0.5 trillion rubles, which is creating new opportunities for Tele2 "as far as purchases, lobbying for our interests, promoting new projects, and investing in 5G."

After the deal with Rostelecom, Tele2 will probably expand its staff, he said.

"We have about 7,000 employees with revenue of about 150 billion rubles, or about 20 million per employee. These are good results that not every company is capable of. There definitely won't be major decreases. We'll probably even expand, because the company is growing, new kinds of business are appearing, the network is growing. There will probably be gradual expansion of the payroll," Emdin said.

On march 12, the head of Rostelecom, Mikhail Oseyevsky, said that Tele2 shareholders had finished discussing a deal on the purchase of 100% of the company by Rostelecom (which currently owns 45%) and that formal procedures were beginning. He did not discuss the timeframe or the financial aspects of the deal.

The other 55% of Tele2 is split between VTB , Bank Rossiya, and Alexei Mordahov's companies.

Earlier, head of VTB Andrei Kostin announced that the bank might acquire a stake in Rostelecom as part of the deal on the consolidation of Tele2.