FAS confirms MegaFon–Scartel merger approval

19 Jun 2012

According to a report by Russia’s Prime Tass news agency, the Federal Antimonopoly Service (FAS) has granted its approval of a motion filed by mobile giant MegaFon and WiMAX-turned-Long Term Evolution (LTE) operator Scartel (Yota) to pursue an operational merger. The decision was made on 15 June after much deliberation by the FAS; the initial motion was filed by Garsdale Services Investment Limited, an affiliate of MegaFon, in late-April 2012. Within days the FAS publicly expressed concerns that the tie-up could negatively affect competition within the sector, and the antitrust regulator’s director, Igor Artemyev, stressed that any deal between the two companies must not prevent third parties from using the LTE frequencies on a wholesale basis, as have previously been agreed.

In April Telecominvest, a company majority-owned by the billionaire Alisher Usmanov, who secured control of MegaFon just days earlier via his AF Telecom holding company, confirmed its intention to form a new venture which would own 100% of Scartel and 50% (plus one share) of MegaFon. Usamanov would, in turn, own 80% of the as-yet-unnamed holding company. According to TeleGeography’s GlobalComms Database, Scartel is 74.9% owned by Telconet Capital Limited Partnership, a privately owned investment fund, with the remaining 25.1% stake held by the government’s Russian Technologies State Corporation.

Russia, MegaFon, Scartel (Yota)