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MegaFon sets sights on Coscom

7 Sep 2006

Russian cellco MegaFon, a subsidiary of TeliaSonera, is in talks to buy 85% of Uzbek operator Coscom from US firm MCT Corp, according to business daily Kommersant. The acquisition will be one of MegaFon’s first forays outside of its domestic market, with its sole foreign interest currently being a stake in a wireless operator in Tajikistan. Coscom was formed in April 1996 and launched operations in July the following year in the capital city of Tashkent. Its GSM-900/1800 network has since been expanded to 35 other major population centres including Samarkand, Bukhara, Navoi and Fergana. In 2005 it widened its footprint to areas including the borders with Kazakhstan and Tajikistan to offer coverage of the ‘Silk Road’, and by mid-2006 had also reached Khorezm and Karakalpakstan. The company focuses on corporate customers (which it claims account for 25% of is customer base) and high spending individuals, but in May 2004 widened its appeal with the launch of a pre-paid service under the banner ‘Real’.

According to TeleGeography’s GlobalComms database, the arrival of Russian investors has helped bump start growth in the Uzbeki wireless market. The first Russian telco on the scene was Mobile TeleSystems (MTS), which in August 2004 announced the acquisition of a 74% stake of Uzbekistan’s largest wireless operator Uzdunrobita for USD121 million. The following month an equity consortium comprising Greek mobile handset retailer Germanos, the EBRD, Global Finance and Mr Panos Germanos announced the purchase of number two operator Unitel for USD73.5 million. However, the consortium’s involvement was short-lived and in early 2006 Vimpelcom announced it would buy Unitel from its shareholders for USD200 million plus debt (USD207 million in total). At the same time Vimpelcom revealed it would also buy 100% of another, smaller Uzbeki cellco, Buztel, for USD60 million plus debt. Vimpelcom quickly announced plans to merge the two cellcos together.

Uzbekistan, MegaFon, Ucell (Coscom)

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