Ukrtelecom’s TriMob again up for sale

19 Sep 2013

Following this week’s news that the takeover of Ukrainian incumbent Ukrtelecom by domestic conglomerate System Capital Management (SCM) has received antimonopoly approval, it has been reported that negotiations have resumed to sell the telco’s mobile division, TriMob. According to newspaper citing a senior manager at a domestic cellco who requested anonymity, the leading prospective purchasers of TriMob – which is the country’s sole 3G 2100MHz W-CDMA/HSPA network operator – are the second-largest player in the mobile segment, MTS Ukraine, and Turkey’s Turkcell, which owns 45% of Ukraine’s third largest GSM operator Astelit (Life:)) in partnership with Ukrtelecom’s incoming parent SCM (which majority controls Astelit and also owns fixed line telco Vega).

TeleGeography’s GlobalComms Database says that in January 2012 Ukrtelecom transferred all its mobile assets into the newly formed TriMob ahead of a planned sale, but by April that year negotiations with potential bidders – including cellular market leader Kyivstar and MTS Ukraine – had hit complete deadlock after failure to agree on a price range. Now it appears that SCM – 100% owned by Ukrainian businessman Rinat Akhmetov – is resuming talks with major cellcos on a potential sale of the cellular business. Turkcell, either by itself or via its participation in Astelit, is an obvious strong contender due to its existing partnership with SCM – presenting the prospect of a TriMob/Astelit 3G/2G consolidation (although this would require further approval from the antimonopoly authority). Although Kyivstar was not named in the report amongst the frontrunners for bidding, it cannot be ruled out as a purchaser; in a comment published by another paper, LigaBusinessInform, the director of corporate communications at Kyivstar, Michael Shuranov, stated that a purchase of TriMob remained ‘one of the possibilities to access the 3G [2100MHz frequencies, most of which are still pending release by the military] which we do not rule out [of] our plans’. Ukrtelecom’s outgoing owner Epic previously attempted to get a price of at least USD500 million for TriMob, and local experts quoted by LigaBusinessInform said there are no indications that this target price would be dropped significantly by SCM. Ukrtelecom (TriMob) currently has an active 3G mobile subscriber base of around 950,000.