Regulator approves Kazakhtelecom’s $600m deal to buy Kcell from Telia
Kazakhstan’s competition regulator has approved the plan for state-controlled Kazakhtelecom to buy Telia’s 75% stake in Kcell.
The deal, for a reported $600 million, will mean Veon’s Beeline is the only privately controlled operator in the Kazakh market.
The regulator’s ruling means Telia has come a step closer to its ambition of removing itself from central Asia. This follows its involvement in a bribery scandal in Uzbekistan that saw Telia fined $965 million by the US, the Netherlands and Sweden and resulted in a complete change of top management at the company.
Telia has successfully sold a number of its operations in Russia and other former Soviet states – some in which Turkcell was a partner thanks to a partnership dating back to the last decade. In September 2017 it sold off its last directly owned stake in Turkcell – just 7% – for $514 million.
In October 2017 Telia sold its 25.2% stake in Russia’s MegaFon for $1.39 billion. In January 2018 Telia and Turkcell sold their interest in Georgia’s Geocell to fixed-line operator Silknet for just $153 million.
In February Telia agreed to transfer its interests in fibre carrier Kaztranscom to a Dubai-registered company, Amun Services. And in March government-owned Azerbaijan International Telecom paid Telia €222 million for its 51.3% its stake in Azercell.
The remainder of Kcell’s shares are traded on the Kazakhstan and London stock exchanges. In the first quarter of 2018 its revenue was the equivalent of $106 million, with a net profit of $10.9 million. It has about 10 million customers.
According to reports from Kazakhstan, conditions for the incumbent operator’s purchase of Telia’s stake in Kcell include maintaining existing subscription plans, keeping independent management and retaining infrastructure development deals Kcell had signed with competitors.
But, with the addition of Kcell, Kazakhtelecom will control two-thirds of the telecoms market in the country. In addition to Kcell, Kazakhtelecom also owns a controlling 51% stake in the Altel/Tele2 joint venture and will be able to buy the rest in the future.