Rotenberg, VTB discussing partnership at Tele2 Russia, details unclear
MOSCOW. April 8 (Interfax) - Russian tycoon Arkady Rotenberg, who is buying a 10.7% stake in Rostelecom , Russia's national telecommunications provider, has begun negotiations on an alliance with state bank VTB , which has purchased mobile operator Tele2 Russia, a telecom industry source told Interfax.
He said the possibility of Rotenberg buying into Tele2 Russia does not eliminate the possibility of future alliances involving Rostelecom.
A source at a major investment company said the most likely scenario is the formation of a joint venture between Rostelecom and VTB involving Tele2 Russia and the state company's mobile assets. Rostelecom would get an option to buy out VTB's stake in the joint venture.
Rostelecom held lengthy negotiations last year on buying Tele2 Russia or forming a joint venture with the company. Rostelecom holds 3G frequencies virtually throughout Russia, including Moscow, where Tele2 does not have a presence, as well as national LTE licenses, which Tele2 does not have. Tele2 Russia operates in 23 Russian regions, and in virtually all of them Rostelecom does not have an active mobile business.
The newspaper Vedomosti reported on Friday that Arkady Rotenberg, who will soon own 10.7% of Rostelecom shares, might use this stake to acquire a blocking stake in Tele2 Russia from VTB, the newspaper Vedomosti reported. The entrepreneur and state-owned bank have already initiated negotiations on a potential partnership.
After Rotenberg buys into Tele2 Russia, the operator will secure the right to work as a mobile virtual network operator (MVNO) in Rostelecom's mobile networks, a source told Vedomosti.
Another source said that Rostelecom's mobile business could possibly be given over to management by Tele2 Russia. In this case, VTB and Rotenberg would become co-owners of the company, which would be able to compete for the title of fourth mobile federal player.
Businessman Yevgeny Roitman might also join up to the deal by contributing his company Antares, which owns frequencies of 1.9 GHz (can be used to deploy LTE networks), to the joint venture between VTB and Rotenberg. Roitman will be nominated to Rostelecom's board of directors for election at the annual general shareholder meeting this summer.
