Rostelecom’s long-running pursuit of WiMAX operator FreshTel, may end up costing as much as RUB880 million (USD14 million), news agency RIA Novosti reports – more than four times the company’s initial valuation. While the company itself is only valued at RUB210 million, it is reportedly set to receive Long Term Evolution (LTE) spectrum permits worth RUB670 million from the State Radio Frequency Commission (SRFC) in the near future, thus increasing Rostelecom’s required investment exponentially.
The FreshTel Group, which also includes affiliated operators InterProject, Stolitsa, Progress and Orion, currently holds federal spectrum licences in the 3.5GHz band, but presides over a modest user base of just 22,000 spread across 40 cities.
As previously reported by TeleGeography’s CommsUpdate, in October 2014 Rostelecom received the necessary approval of the Federal Antimonopoly Service (FAS) to acquire FreshTel. In August 2014 Rostelecom had been named as a potential buyer for the company after the FAS gave its permission for a 99.9% stake in the WiMAX operator to be transferred from Cyprus-based Comenetti Investments to local financial group Vnesheconombank (VEB), a shareholder in Rostelecom.