Potential Rostelecom-MegaFon merger would improve network coverage, but competition important - minister

ALMATY. Feb 3 (Interfax) - A potential merger between Russian national provider Rostelecom and mobile provider MegaFon could be good for the companies' networks and their territorial coverage, but it is important to ensure competition on the market, Russian Digital Development Minister Maksut Shadayev told reporters.

National daily Kommersant, citing sources, reported at the end of January that Rostelecom was interested in buying MegaFon and had asked for government approval for such a deal.

Shadayev said he is not prepared to discuss the configuration of the deal. However, this deal, like any similar merger of major providers, potentially risks reducing competition, though it would have a positive impact on the development of telecom networks.

"Clearly, a merger of networks could have a very substantial cumulative effect, the networks of the two operators would be combined. This would enable us to expand territorial coverage, including cover small population centers, by redistributing equipment," Shadayev said on the sidelines of the Digital Almaty 2023: Digital Partnership in the New Reality forum.

"[Right now] every provider has their own network and every provider only serves the subscribers of their own network. If a decision is made on a merger of providers, in what configuration I'm not prepared to discuss right now - whether it's Rostelecom, MegaFon or someone else - of course this will make it possible to reuse some equipment and provide better coverage where it is currently lacking. But the issue of competition is important," Shadayev said.

He refrained from commenting on the progress of talks on this deal. "These are corporate relations, we're not prepared to discuss this right now," Shadayev said.