Moscow court blocks Megafon Turkcell merger

15 November 2010 |


A Moscow appeals court has blocked an attempt by Nordic telco Teliasonera and industrial conglomerate Alfa Group to combine their stakes in Russian mobile operator Megafon, merging it with Turkish MNO Turkcell.

Russian investment company Telecominvest, Megafon’s third largest shareholder, brought the proceedings, claiming that the move would violate rules on foreign investment in strategic Russian industries.

Telecominvest CEO Alisher Usmanov said he now intends to buy out other Megafon shareholders. Usmanov had earlier rejected an offer to be part of a Megafon Turkcell merger, saying instead that he favoured further consolidation between Russia’s telecoms companies. Teliasonera and Alfa are expected to challenge the appeal court’s ruling.

“While Russia’s MNOs have in the past focussed on international expansion within the region, they’re now looking at opportunities closer to home,” said Carsten Brinkschulte, CEO of vendor Synchronica. “Larger operators are trying to evolve into integrated technology providers.”

Meanwhile Megafon has announced that it is to acquire St Petersburg-based regional operator Metrocom in a deal worth $67 million. Rival operators Mobile Telesystems (MTS) and Rostelecom have already ruled themselves out of Metrocom’s auction, describing the starting price as prohibitively expensive.

Megafon has selected Chinese vendor Huawei to build backbone nodes for a 40Gb IP/MPLS network in Russia’s largest cities, including Moscow and St Petersburg. It said the move will allow it to extend 3G services to subscribers in those regions, and said the routers will support future scalability of up to 100Gb.

“In the all-IP era, network infrastructure requirements include dynamic bandwidth extension, high quality of service, reliability and management of all system components,” said Oleg Nikolaenko, CTO of Megafon.¦