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Russian MTS eyes third Moldovan GSM license

MOSCOW-The biggest Russian carrier Mobile TeleSystems (MTS) is working to receive a third GSM license in the tiny former Soviet republic of Moldova through a multi-step deal, which is likely to begin with the purchase of the national Moldtelecom landline operator.

Five years ago, the Moldovan government tried to sell Moldtelecom, but postponed the idea, as investors offered too small a price. However, in mid-2002 the government said it would issue a GSM license to Moldtelecom to make it more attractive for privatization. The French Voxtel and Turkish Moldcell currently operate GSM networks in Moldova.

The government announced an international tender and said it wants at least US$120 million for a 51-percent stake in the company. Tender terms allowed major telecom companies with at least 1 million clients, US$150 million annual turnover and US$300 million assets to participate.

The Moscow City Telephone Network (MGTS), in which Sistema-Telecom Company holds a major stake, and the U.S.-registered Global Telecom filed applications, but only MGTS, which runs landline networks in the Russian capital, succeeded to pass the preliminary stage and thus remained the only bidder.

MGTS Director General Semen Rabovsky said his company is participating in the tender “under the banner of Sistema-Telecom,” which is also a major MTS shareholder. Russian wireless market experts immediately commented that Sistema is working to create a stronghold for MTS’ penetration in Moldova, following its launch in neighboring Belarus this year.

“MTS has been displaying interest in Moldova for a long time and is now close enough to the target. The GSM license is a major Moldtelecom asset for it,” said Anton Pogrebinsky from J’son & Partners telecom consultancy in Moscow.

Moldtelecom has 676,000 clients, and its 2001 net profit was US$8 million.

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