ER-Telecom aiming to acquire St Petersburg’s WestCall

6 May 2016

Perm-based Russian cable TV and fibre broadband operator ER-Telecom has received Federal Antimonopoly Service (FAS) approval to place an offer for 100% of St Petersburg-based telco WestCall, reports ComNews. The report adds that ER-Telecom may also be lining up a bid for the entire WestCall group, which also has branches in Moscow (metropolitan), Moscow region, St Petersburg/Leningrad region, Ryazan, Volgograd, Tolyatti and Samara. The target company operates telephony, broadband, IPTV and corporate data services and has an estimated 85,000 residential subscribers and 10,000 corporate clients in St Petersburg, whilst estimates for the wider group of 350,000 consumer/25,000 business subscribers have been published in the media (the WestCall website currently claims ‘more than 15,000’ business/government clients on its books). The approximate cash purchase value for the St Petersburg division is estimated by analysts (cited by ComNews) at RUB900 million (USD13.7 million) plus debts, whilst the wider group is estimated at up to RUB2.5 billion.

Note that previous announcements of FAS permission for takeover bids in Russia have not necessarily resulted in the named party purchasing a target company – in some cases the FAS issues permission for multiple bidders to proceed; other major Russian telcos including Rostelecom, VimpelCom (Beeline) and MegaFon have indicated their interest in West Call.

TeleGeography’s GlobalComms says that ER-Telecom operates in the residential and corporate fixed broadband/pay-TV markets of 56 Russian cities in 36 regions, and has over three million fixed broadband subscribers, putting it in second place in the segment behind Rostelecom and narrowly ahead of MTS. The group already operates in the St Petersburg area, and in January 2014 it completed the purchase of St Petersburg-based broadband provider InterZet.

Russia, ER-Telecom (Dom.ru), WestCall