MegaFon snaps up four more chunks of SMARTS

18 Aug 2015

Nationwide Russian cellco MegaFon has completed the 100% acquisition of four subsidiaries of Volga regional GSM mobile operator SMARTS, in Yaroslavl, Cheboksary, Samara and Astrakhan, for an undisclosed price, TelecomDaily reports. Last month MegaFon received antimonopoly approval for the four unit purchases alongside SMARTS’ Elista division (completion pending), while early this year it acquired SMARTS’ Volgograd unit for RUB46 million (USD703,000). The Russian newspaper notes that MegaFon is mainly interested in gaining SMARTS’ frequency resources, although the acquisitions will increase its regional subscriber market shares by a small margin.

Following shareholder litigation stretching back to 2005, in 2013 SMARTS decided on the piecemeal divestment of its remaining assets. The group initially consisted of 16 regional divisions: SMARTS, Astrakhan-GSM, Penza-GSM, Shupashkar-GSM, Yaroslavl-GSM, Volgograd-GSM, Orenburg-GSM, and nine SMARTS divisions in Samara, Ivanovo, Ufa, Saratov, Kazan, Yoshkar-Ola, Elista, Saransk and Ulyanovsk.

In 2011 Rostelecom bought 50% of SMARTS Volgograd for RUB2.3 billion and 49% of SMARTS Orenburg for USD4 million. In 2013 Tattelecom acquired SMARTS Kazan, while in early 2015 MTS acquired three SMARTS subsidiaries in Penza, Ufa and Ivanovo for a total price of RUB3.13 billion. The ownership of SMARTS Samara remains subject to a ten-year-old court dispute centring on a 12% stake claim by Sigma Capital Partners; an offer from the Russian government to buy the regional division for RUB5 billion is also pending.

Russia, MegaFon, SMARTS Group