TASHKENT/FEB. 11 (The Bulletin) — Russia’s MegaFon agreed to buy into the Uzbek telecoms market with a $100m investment in a joint-venture with Uzbekistan’s government that will take control of Ucell, a former subsidiary of Swedish operator Telia.
In the deal, MegaFon, the second largest Russian telecoms company, will set up a subsidiary called Digital Invest that will effectively buy a 51% stake in a joint-venture called Digital Holding which will run and own Ucell.
In a statement, MegaFon CEO Gevork Vermishyan said it was a good time to be investing in the Uzbek mobile telecoms market.
“In terms of the consumption of digital services, Uzbekistan is one of the most promising markets in the CIS, which over the past 10 years has shown more than threefold growth in cellular subscribers, but at the same time it is still far from saturation,” he said.
Uzbekistan is Central Asia’s most populous country with 34m people and is, in many ways, the natural hub of the region. But despite these attributes, Uzbekistan is playing catch-up with its neighbours on issues such as mobile phone usage, internet penetration and cashless payments, a legacy of 25 years of rule by the reclusive and isolationist Islam Karimov. He died in 2016. Since then, Shavkat Mirziyoyev has governed the country.
Ucell is the biggest mobile operator in Uzbekistan, followed by Veon’s Beeline and Mobiuz, a state-owned company that had previously been operated by Russia’s MTS.
Telia quit Uzbekistan, and other markets in the FSU in 2017/18, after it admitted that it had paid bribes for market entry in 2008/9.
— This story was first published in issue 472 of The Bulletin