Rumoured Vimpelcom overhaul continues; telco considers splitting mobile, fixed businesses

13 Nov 2012

Russian telecoms giant Vimpelcom is considering splitting its fixed and mobile businesses, Vedomosti reports. Sources close to the company told the business daily that the company’s fixed unit may be offloaded due to low margins and intense competition, although a decision has yet to be taken on the matter.

The news follows a series of unexpected developments at the Amsterdam-headquartered telecoms group. Last week Vedomosti reported that the company planned to restructure its international businesses and had selected seven markets that it planned to focus on going forward. Based on a source close to the company’s CIS unit, the targeted areas are likely to be Russia, Italy, Algeria, Ukraine, Kazakhstan, Pakistan and Bangladesh. The plan is to have these countries’ operations work directly under the group’s Amsterdam head office.

As previously reported by TeleGeography’s CommsUpdate, last month it was revealed that Vimpelcom intended to sell several of its businesses in emerging markets across Africa and Asia, as part of a rationalisation of the group’s global business. It was understood that the company had already spoken to potential buyers of its sub-Saharan African units in Burundi (U-Com Burundi) and the Central African Republic (Telecel-RCA); the company is also expected to offload its Zimbabwean business – Telecel Zimbabwe – after resolving outstanding ownership and licensing issues. The three businesses are collectively valued at around USD60 million. Meanwhile in Asia, Vimpelcom is also prepared to offload its Beeline units in both Cambodia and Laos after struggling to compete effectively with the locally-owned operators.

In other news, Moscow’s Ninth Arbitration Court of Appeals has kept in force a number of injunctions imposed on the Vimpelcom Group, over a lawsuit initiated by the Federal Antimonopoly Service (FAS), the court’s representatives have revealed to the Russian media. The court thus rejected claims filed by Norway’s Telenor, Weather Investments II, which is owned by Egyptian tycoon Naguib Sawiris, and Russia’s Altimo, all of whom sought to void the injunctions.

Russia, Beeline (Russia), VEON