Tag Archives: telecoms

Beeline profit rise in Kyrgyzstan

NOV. 11 2015 (The Conway Bulletin) — Beeline Kyrgyzstan, owned by Russia’s VimpelCom, posted Q3 profits up nearly 19% from Q2. Beeline said profit had risen because Kyrgyz were more relaxed about spending more on their mobile phones. Compared to last year, Beeline’s customer base was up only 1.7%. Analysts and businesses have said that in Kyrgyzstan, people are spending more and more time on their mobile phone surfing the web.

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(News report from Issue No. 256, published on Nov. 13 2015)

Kazakh President’s daughter makes online profit

NOV. 11 2015 (The Conway Bulletin) – An investigation by a Kazakh website showed a company linked to the youngest daughter of President Nursultan Nazarbayev, Aliya Nazarbayeva, is charging 2% for online payments through Kazakhtelecom.

In June, Kazakhtelecom, Kazakhstan’s largest provider of internet services, imposed a 2% charge when customers paid for its services online.

An investigation by the informburo.kz website showed that the service company Instant Payments had become the intermediary for these transactions and was the ultimate beneficiary of the 2% fee. Ms Nazarbayeva is the founder and owner of Instant Payments, informburo.kz reported. Within a day, the report had disappeared from the informburo.kz website but not before it had triggered public anger.

Typical of this anger was a comment from Vladimir P on alau.kz. “We are living a crisis, but everything goes in their large, immense pockets, not to the people,” he wrote.

Neither Ms Nazarbayeva nor Kazakhtelecom have commented. There is no suggestion of any wrong-doing.

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(News report from Issue No. 256, published on Nov. 13 2015)

Norway police arrests Ex-VimpelCom CEO over Uzbek bribes

NOV. 5 2015 (The Conway Bulletin) — Police in Norway arrested Jo Lunder, the former CEO of Russian telecoms company VimpelCom, in connection with alleged bribe paying in Uzbekistan, further damaging the reputation of foreign telecoms companies operating in Central Asia.

A few days earlier, Norway’s industry minister, Monica Maeland, sacked Svein Aaser as Telenor’s chairman over the corruption probe. She said that Telenor had been handling an internal investigation into the case badly.

“I no longer have confidence in Telenor’s chairman,” Ms Maeland said in a statement.

VimpelCom is alleged to have paid millions of dollars in bribes to Gulnara Karimova, the eldest daughter of President Islam Karimov, for mobile licences in Uzbekistan. Swedish TeliaSonera is also being investigated for bribe-paying.

In October, Telenor said it wanted to sell its 33% stake in VimpelCom, effectively cutting the company’s operations in Central Asia and the South Caucasus.

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(News report from Issue No. 255, published on Nov. 6 2015)

Kazakh and Swedish telecoms form joint venture

NOV. 4 2015 (The Conway Bulletin) – Swedish telecoms company Tele2 and Kazakhstan’s state-owned Altel said they will form a joint venture. The new joint venture will start operations in 2016 and will hold exclusive rights to the country’s 4G network.

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(News report from Issue No. 255, published on Nov. 6 2015)

Tele2 and Kazakhstan’s Altel team up to establish new mobile company

NOV. 4 2015 (The Conway Bulletin) — Swedish telecoms company Tele2 said it will create a joint venture with Kazakhstan’s Altel to grab market share and monopolise access to 4G technology, a bold move in a region where corruption scandals have scarred rival Nordic companies.

Tele2 Kazakhstan is the third-largest operator in the country, after TeliaSonera’s Kcell and VimpelCom’s Beeline (Norwegian Telenor owns a 33% stake in VimpelCom). Altel is a subsidiary of Kazakhstan’s state-owned Kazakhtelecom and the only operator with a 4G licence in the country.

Tele2’s CEO, Alison Kirkby, said that the deal will give the company a major lift and position it to attract more customers.

“This transaction will enable our customers to gain access to Altel’s 4G network and to benefit from its accelerated rollout across Kazakhstan,” Ms Kirkby said of the joint venture.

In the past two months, TeliaSonera and Telenor have said they want to sell off their assets in Central Asia and the South Caucasus after US and Dutch authorities started investigations into corruption allegations in Uzbekistan. Tele2 have, possibly, spotted an opportunity and decided to push to form a joint venture with Altel.

But it will be tough, as price battles have pushed down profit margins in the telecoms sector in the past two years. In July, former Tele2 CEO Mats Granryd said: “Kazakhstan is turning into a real bloodbath when it comes to pricing.”

When the joint venture is formalised in 2016, Tele2 will own a 49% stake and will also be the company’s operator. Pietari Kivikko, Tele2 Kazakhstan’s chairman, will serve as the top manager in the new joint venture.

The depreciation of the tenge in August, after the Central Bank cut its US dollar peg, has hit profits at telecoms companies which earn tenge but accrue costs in foreign currencies.

This year, Tele2 Kazakhstan has fared better than the competition. In Q3, it increased its revenue by 34% compared to last year and in the first nine months of 2015, it increased its customer base by 33% to over 4m users.

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(News report from Issue No. 255, published on Nov. 6 2015)

Tele2 profits in Kazakhstan increase by 34%

OCT. 27 2015 (The Conway Bulletin) — Swedish mobile operator Tele2 posted a 34% increase in revenues at its Kazakh subsidiary in Q3 2015, compared to the same period last year. The increase was partly due to the fall in the value of the tenge. Earlier in September, Pietari Kivikko, chairman of Tele2’s Kazakh subsidiary, had predicted a fall in revenues for all telecoms companies in Kazakhstan.

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(News report from Issue No. 254, published on Oct. 30 2015)

Problems at Kazakhstan’s Kcell weigh down TeliaSonera profit

OCT. 20 2015 (The Conway Bulletin) — Swedish telecoms company Telia- Sonera said 2015 profit will be lower than expected due to price competition in Kazakhstan and that it is also struggling to sell its assets in Uzbekistan.

The profit warning will play badly for TeliaSonera which said last month that it wanted to sell its subsidiaries in Eurasia, of which Kcell and Ucell are the biggest.

In Jan.-Sept. 2015, Kcell’s profits fell 13% compared to the same period last year, a drop that Johan Dennelind, TeliaSonera’s CEO, blamed on competition and the government’s decision to let the tenge float free against the US dollar in August.

But Kazakhstan is not TeliaSon- era’s only problem in Central Asia. Marred by corruption allegations, TeliaSonera’s operations in

Uzbekistan have become a dead- weight, dragging the sale of the company’s assets.

“Selling Uzbekistan isn’t an easy task,” Mr Dennelind was quoted as saying in an interview with The Wall Street Journal.

US and Dutch prosecutors are investigating whether TeliaSonera paid bribes to secure mobile licences in Uzbekistan in 2007 and 2008.

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(News report from Issue No. 253, published on Oct. 23 2015)

VimpelCom sells kit in Kazakhstan, Armenia

OCT. 21 2015 (The Conway Bulletin) — Russian telecoms company VimpelCom said it is selling 50,000 phone towers across the former Soviet Union for $5b. VimpelCom, headquartered in the Netherlands, hired several banks to broker the deal. Armenia, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan are among the countries involved in the deal.

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(News report from Issue No. 253, published on Oct. 23 2015)

Telenor wants out Uzbek market

OCT. 6 2015 (The Conway Bulletin) – Telenor, a Norwegian telecoms firm, said it is ready to sell its stake in Vimpelcom, a Russian company that also operates in Central Asia under the Beeline brand (Oct. 5). Vimpelcom is under investigation in the US and in the Netherlands for allegedly paying a bribe to enter the Uzbek market.

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(News report from Issue No. 251, published on Oct. 9 2015)

Telenor also says to quit region’s mobile phone market

ALMATY, OCT. 5 2015 (The Conway Bulletin) — Following hard on the heels of Scandinavian rival TeliaSonera, Norwegian telecoms company Telenor effectively said it wanted to quit Central Asia and the South Caucasus when it announced that it would sell its 33% stake in Russian mobile operator Vimpelcom.

Vimpelcom owns several subsidiaries in Central Asia and the South Caucasus under its Beeline brand and allegations of corruption, much like those that have dogged TeliaSonera’s companies in the region, have gathered momentum over the past year.

Vimpelcom, which is headquartered in the Netherlands, has had a rough year losing about one third of its share value because of the worsening economic downturn in Russia and the general lack of profitability for telecoms companies across the Eurasian region.

Sigve Brekke, Telenor’s CEO, said the company was leaving the post- Soviet region to focus on its core operations in Europe but analysts said the real reason may well be the allegations of bribery levelled at the Vimpelcom subsidiary in Uzbekistan. Indra Overland, a research professor at the Norwegian Institute of International Affairs, said the corruption scandal involving Vimpelcom in Uzbekistan had damaged Telenor’s reputation.

“Telenor has been badly burned by its implication in the corruption scandal in Uzbekistan,” he said.

News that Telenor wants to quit Central Asia and the South Caucasus is another blow to the region’s reputation as a place for Western companies to do business.

Overshadowed by an increasingly gloomy economic outlook which has forced currencies to devalue and inflation to rise, Western companies in Central Asia also appear to have had enough of the region’s suspect corporate governance record.

An allegation of bribery emerged against Vimpelcom subsidiaries during investigations in the US, Sweden and in the Netherlands last year. Prosecutors said Vimpelcom had paid a bribe to gain access to Uzbek mobile licences, similar to a charge levied against TeliaSonera.

Telenor’s shares could go up for sale for approximately $2.4b and analysts said Vimpelcom’s main stake- holder Mikhail Fridman might seize the opportunity to consolidate his ownership. Daniel Johansson, an analyst at Fondsfinans, told Bloomberg: “There’s zero chance that it will be someone else completely unknown, like a Western investor.”

Vimpelcom has not commented on speculation it could buy Telenor’s stake in its businesses.

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(News report from Issue No. 251, published on Oct. 9 2015)