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Telekom Austria confirms eyeing purchase in Belarus

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14.09.2007

Telekom Austria said 10.07.2007 that it was in talks to buy a Belarussian company, a deal analysts said would signal that the country's tightly controlled telecoms sector was opening up to foreign investment.
The Austrian firm was looking at buying one of Belarus ' largest mobile operators for more than 1.6 billion euros ($2.2 billion), Austrian Press Agency reported Friday.

The company confirmed Monday that it was looking at a potential acquisition in Belarus but could not "give any additional statement at this point in time," saying only that the company "reiterates its strategy for profitable growth."
The Belarussian Communications Ministry could not be reached for comment Monday.
Analysts said that if successful, Telekom Austria 's bid would represent a big shift in the Soviet-style economic policy that Belarus has pursued under President Alexander Lukashenko. It could spur growth in the country's telecoms market and pave the way for Russian firms to increase their presence there, they said.
"Despite high growth prospects, telecoms companies are rather coy to invest in Belarus because of the government's tight grip on all sectors of the economy," said Vitaly Kupeyev, a telecoms analyst with Alfa Bank. Kupeyev said that up to now, the Belarussian telecoms sector was classified as "strategic," meaning that foreign companies could not own more than 49 percent in a company, adding that such regulations have stifled growth and harmed competition.
With a population of 9.7 million, Belarus has more than 6.3 million subscribers, according to the country's Communications Ministry. The mobile penetration rate is 62 percent, according to figures from consultancy J'son & Partners.
The country's largest mobile operators are Mobile TeleSystems-Belarus, which controls 54.3 percent of the market with 2.25 million subscribers, and Mobile Digital Communications, whose brand Velcom has 41.9 percent. Both are majority-owned by the state, as are their smaller competitors Best and BelCel, which have 2.3 and 1.4 percent of the market, respectively.
An aide to Communications Minister Nikolai Pantelei said that Mobile Digital Communications came under foreign control last month, but declined to provide information on the buyer, Bloomberg reported.

Source: www.themoscowtimes.com

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