Billionaire Vladimir Evtushenkov,
with his wireless carrier facing stiffer competition in Russia,
said he is studying takeover targets including Telefonica SA (TEF)’s
Czech unit to expand his telecommunications business abroad.
Evtushenkov, owner of Russia’s largest wireless operator
OAO Mobile TeleSystems (MBT), said in an interview he is considering
targets in various markets and doesn’t have any concrete
proposals pending. He is also analyzing growth opportunities in
Russia, with a continuing interest to buy Tele2 Russia, and
India, where he already has wireless operations.
MTS, founded by Evtushenkov two decades ago, is growing at
its slowest pace since 2009 after amassing 101 million
subscribers in Russia and former Soviet republics. A purchase
such as Telefonica SA’s Czech business would mark a leap toward
Europe, a hotbed for telecommunications consolidation.
“We are considering all possibilities everywhere,”
Evtushenkov, 64, said this week in the Moscow office of his
holding company AFK Sistema. (SSA) “We receive different proposals
and we study everything very thoroughly.”
Telefonica Czech Republic AS rose to its highest since June
17, closing up 4 percent at 296.4 koruna. Sistema fell 0.5
percent to 28.70 rubles in Moscow, while MTS rose 0.6 percent to
282.21 rubles.
Telefonica’s Czech unit is the country’s largest operator
with 9.3 million users in the Czech Republic and Slovakia. Its
stock had lost more than a quarter of its value in the past year
through yesterday, cutting the company’s market capitalization
to about $4.7 billion.
Topping VimpelCom
“We never comment on rumors and we have no comment on this
one,” Hany Farghali, a spokesman for Telefonica Czech, said
from Prague.
Telefonica, Spain’s biggest phone company, is seeking to
sell regional assets to help cut its debt, with the Czech unit
high on a list of potential businesses for sale, people with
knowledge of the matter said in April.
A Telefonica spokesman in Madrid declined to comment.
While demand for wireless data keeps rising in Russia,
voice revenue is slowing as almost everyone already has a mobile
phone. MTS’s first-quarter revenue advanced 2 percent, also hurt
by a legal dispute in Uzbekistan that forced the company to shut
its operations in the country.
Sistema is developing MTS as a company which “makes value-accretive acquisitions and not just acquisitions at any price,”
Evtushenkov said.
India, Russia
That’s why MTS’s market value, at about $20 billion, tops
that of rival VimpelCom Ltd. (VIP), which operates in 15 countries and
has twice as many users, Evtushenkov said. Billionaire Mikhail Fridman’s VimpelCom, struggling to cut debt after buying assets
in Africa, Asia and Italy, is valued at about $18 billion.
Sistema’s biggest foreign asset is in India, where it has
spent about $3.6 billion since 2007 to develop wireless unit
Sistema Shyam TeleServices Ltd. The unit operates under the MTS
India brand and may be sold to MTS once it turns operationally
profitable, Sistema has said.
The Indian unit has about 10 million subscribers, while
local market leaders Bharti Airtel Ltd. (BHARTI) and Vodafone Group Plc (VOD)
have more than 150 million users each, according to the Telecom
Regulatory Authority. Sistema had been looking into buying
Indian operators such as Tata Teleservices Ltd. or Aircel Ltd.
which have over 60 million users each, the Economic Times of
India reported this year.
Tele2 Russia
Evtushenkov declined to comment on any acquisition targets
in India.
“We came to India for at least 20 years and we don’t
expect success immediately,” he said. Indian authorities have
pledged to pass merger regulations by year-end which will make
the situation clearer, he said. “Things are progressing each
and every week.”
At home, Evtushenkov doesn’t see the recent acquisition of
wireless operator Tele2 Russia by state-run lender VTB Group (VTBR) as
a sign of an increase in the government’s role in the economy.
MTS tried to buy Tele2 Russia first from its Swedish owners and
then approached VTB after it had bought it.
“I don’t exclude that this year VTB will resell this asset
to some private structure in Russia,” he said. “It may be me
or a consortium of investors. We made an offer to VTB and are
ready to buy.”
To contact the reporter on this story:
Ilya Khrennikov in Moscow at
ikhrennikov@bloomberg.net
To contact the editor responsible for this story:
Kenneth Wong at
kwong11@bloomberg.net
Enlarge image
Billionaire Evtushenkov Eyes Wireless Expansion Beyond Russia
Andrey Rudakov/Bloomberg
The logo of OAO Mobile TeleSystems sits on display outside one of the company’s stores in Moscow, Russia.
The logo of OAO Mobile TeleSystems sits on display outside one of the company’s stores in Moscow, Russia. Photographer: Andrey Rudakov/Bloomberg