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Coscom being forced out?

8 Jun 2007

According to Russian IT news site C.News US-based firm MCT Corp may be forced out of the Uzbek telecoms market on the grounds that its subsidiary, Coscom, has made insufficient investment. According to C.News, Coscom’s licence was suspended recently for a second time. ‘Insufficient capital investment on the part of the operator resulted in serious network overload and faulty operations. The increase in the number of subscribers in the republic in the nearest future can absolutely disable Coscom’s network’ said the Uzbek Information and Telecommunication Agency. ‘Insufficient investment into operations could become the legal ground for the suspension or recall of Coscom’s licence’ it added.

However, some analysts have pointed to the fact that Coscom may have fallen foul of deteriorating relations between Uzbekistan and the US since 2005. Others say that Coscom’s treatment is designed to lower the value of the company; MCT has been seeking to offload its 85% stake since 2006 but the licence issues have seen its worth fall. After the February licence suspension Coscom is reported to have lost 15% of its customer base, although the actua figure could be much higher. The Russian operator MegaFon in considered the most likely buyer for the company given that rival Russian cellcos VimpelCom and MTS already operate in Uzbekistan.

Uzbekistan, Ucell (Coscom)

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