INTERVIEW: Minister expects synergy from Rostelecom–Tele2 Russia deal

Interview with Communications and Mass Media Minister Nikolai Nikiforov

MOSCOW, Nov 25 (PRIME) -- Russian Communications and Mass Media Minister Nikolai Nikiforov expects a synergy from a proposed joint venture between wireline giant Rostelecom and regional discount mobile operator Tele2 Russia and sees no obstacles standing on the path of the deal, Nikiforov said in interview with PRIME.

“I do not see any reason to cancel (the deal). I expect synergy from this joint venture and believe this deal to be quite reasonable,” Nikiforov said.

“Of course there is a range of issues (to be resolved before the deal), but I do not see any irresolvable problems,” he said, adding that the government had already made certain decisions over the anticipated deal, and the crucial decisions are now to be made by the companies’ boards of directors.

Nikiforov also said he believes that Tele2 Russia runs its business more efficiently than the country’s Big Three mobile operators, namely MTS, MegaFon, and VimpelCom. “This is one of the reasons behind the appointment of Dmitry Strashnov (Tele2 Russia’s ex-CEO) as head of Russian Post. We want him to show perfect business results at this company, which is in the crunch now,” Nikiforov said.

Rostelecom is expected to receive a 45% in the proposed joint company, in which the operator will contribute its mobile assets. The remaining 55% will belong to the current co-owners of Tele2 Russia – banking group VTB and firms affiliated with businessmen Yury Kovalchuk and Alexei Mordashov.

Nikiforov has no concerns about the government’s stake in the proposed joint venture. “The government’s total stake in the joint venture will exceed 50% taking into account a stake held by state-controlled VTB. I see no problems here,” Nikiforov said.

Earlier in November, business daily Kommersant wrote that head of the state property service Olga Dergunova proposed in her letter to Deputy Prime Minister Arkady Dvorkovich to discuss the government’s risks link to the proposed Rostelecom–Tele2 Russia deal.

Dergunova said that a lack of control in one of the key business segments and the lack of options to buy the necessary controlling stake may in the future negatively affect the valuation of the government’s stake in Rostelecom during the company’s privatization.

However, Nikiforov said that the government has no goal to “become a player of a competitive market.”

“All the Big Three operators are privately-owned companies, the government has no stake in any of these companies, but all of them are operating and developing well. I think that the government should exit the companies working on the competitive market,” Nikiforov said.

He also said that no candidates for CEO of the yet-to-be created joint venture have been discussed so far.

End