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MegaFon, USM complete Ucell takeover; JV begins operations in Uzbekistan

1 Oct 2021

Russian mobile operator MegaFon and its parent USM Telecom declared on 30 September 2021 the completion of their previously announced acquisition of a majority stake in Uzbekistan’s mobile market leader Ucell via the formation of a joint venture (JV) digital solutions company, Digital Holding, which is now operational.

In February 2021 MegaFon and USM Telecom agreed the purchase of a controlling stake in Ucell (registered as Coscom), a deal involving Uzbekistan’s Agency for State Assets Management (ASAM) transferring 100% of Ucell’s authorised capital into newly-formed JV Digital Holding – also comprising USM’s Uzbek assets CRPT Turon and ICS Holding Uzbekistan – owned by Digital Invest (51%, itself owned equally by MegaFon and USM Telecom) and ASAM (49%). MegaFon/USM Telecom agreed to contribute USD100 million investment into Digital Holding.

Digital Holding will focus on expanding and upgrading telecoms/digital infrastructure/services across Uzbekistan alongside development of advanced digital solutions technologies and systems. Andrey Shishkovsky, previously Regional Development Director of MegaFon (Russia), has been appointed CEO of Ucell, replacing Vladimir Kravchenko, who becomes the head of Digital Holding. Quoted in a press release, Olimjon Umarov, Advisor to the Prime Minister of Uzbekistan, said: ‘The digital economy has been identified as the main driver of economic growth, therefore, it is necessary to improve the quality of mobile communications and the internet, to accelerate the development of e-commerce systems, digital services and software products.’

Digital Holding also comprises USM’s existing Uzbek assets ICS Holding Uzbekistan and CRPT Turon. ICS Holding is a Russian diversified IT group focused on digital transformation of large enterprises, information security, data storage systems, cryptography, quantum computing, machine learning, neural networks, blockchain tech and AI. CRPT (Centre for Research in Perspective Technologies) – a joint venture of USM (50%), Rostec (25%) and Elvis-Plus Group (25%) – implements large-scale digital economy projects including a track-and-trace system for goods in Russia; CRPT Turon is a public-private partnership which has implemented a system of digital product labelling in Uzbekistan.

Uzbekistan, MegaFon, Ucell (Coscom)

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