Agency WPS
The Russian Business Monitor (Russia)
August 22, 2007 Wednesday
MTS NEGOTIATES ON ACQUISITION OF THE LARGEST CELLULAR OPERATOR OF
ARMENIA
MTS is negotiating on the purchase of the largest cellular operator
of Armenia K-Telecom (VivaCell trademark). Analysts estimate the
company at up to $600 million. If the deal takes place, the Armenian
cellular market will be divided by MTS and VimpelCom.
The network of K-Telecom was put into operation in the middle of
2005. According to ACM-Consulting, now the company has more than 1
million subscribers or 100% more than Armentel. Penetration of
cellular communication in Armenia amounts to 50%.
Partner of ACM-Consulting Anton Pogrebinsky considers K-Telecom to be
a good acquisition, "This is a market leader. Besides, there are only
two cellular operators in Armenia, which means that there is no
bitter competition." Analyst of Aton Nadezhda Golubeva presumes that
entire K-Telecom costs $420-480 million. Analyst of Troika Dialog,
Yevgeny Golosnoi, estimates the company a little higher at $500-600
million. Golosnoi explains that real penetration of cellular
communication in Armenia is most likely lower than the official level
and amounts to about 35%. He concludes, "The market has potential for
growth, that is why K-Telecom should be sold with a premium."
Source: Vedomosti, August 21, 2007