Usmanov creates holding company to combine assets in Russia for LTE

17 July 2012 | Kavit Majithia


Russian billionaire Alisher Usmanov is to combine his stake in mobile operator MegaFon into a holding company that will own state-backed operator Scartel.

MegaFon won a next-generation mobile licence last week, allowing the company to provide wireless internet using LTE technology. It is widely expected Usmanov will take the company public through a London IPO, and integrate both MegaFon and next-generation operator Scartel to provide an advanced network in Russia.

Usmanov is renowned as an aggressive technology investor, and will capitalise on the integration between both companies by providing LTE services through the Yota brand.

The holding company will take a 100% stake in Scartel and a 50% stake in MegaFon. The new holding company will be 82% owned by Usmanov’s AF Telecom and 18% owned by Telconet Capital and Russian Technologies.

Telconet Capital and Russian Technologies previously owned Scartel, and was valued at $1 billion by its previous holders.

It is expected the introduction of a holding company will mean a speedier introduction of new technology in Russia, in addition to reduced capital costs in building a next-generation LTE network, according to a press release.

Other winners in Russia’s recent LTE licence auction include Rostelecom, MTS and VimpelCom.