Report: Russia’s Rostelecom to buy 55% in Tele2 over heavy costs

MOSCOW, Jul 18 (PRIME) -- Russian state-controlled telecom giant Rostelecom will buy 55% in mobile operator T2 RTK Holding, in which it now owns 45%, from VTB, firms of Yury Kovalchuk and Alexei Mordashov until the end of 2016, online edition ComNews reported Monday, quoting sources.

The sources explain the deal by heavy costs of T2 RTK Holding on a network in Moscow, the lack of money to develop infrastructure in the Moscow Region and worsened financial indicators of the company.

One of the people familiar with the matter said Rostelecom estimated costs of T2 RTK Holding, working as Tele2, at 450 billion rubles, excluding debts, meaning that a 55% stake would cost 250–270 billion rubles. The state-controlled operator will also have to invest in the network in the Moscow Region.

T2 RTK Holding’s valuation looks quite realistic; for comparison, capitalization of mobile operator MegaFon, which also focuses only on the domestic market, amounted to 813.56 billion rubles on the Moscow Exchange as of July 15. MegaFon had 74.5 million subscribers as of the end of March, while T2 RTK Holding had 38.4 million.

(63.1697 rubles – U.S. $1)

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