MOSCOW-The Russian Ministry for Anti-Monopolist Policy (MAP), which last year ordered the major national communications holding company Svyazinvest to dispose of non-core wireless assets, changed its mind and allowed the holding to play a role in the mobile market.
In February 2002, Svyazinvest completed the first stage of unification of its 65 regional subsidiaries into seven basic companies. However, the unification had to be approved by MAP, which demanded the companies to dispose of non-core assets that included wireless communications, Internet and television. MAP feared it would be difficult for independent operators to compete with the unified Svyazinvest subsidiaries.
The subsidiaries and investors objected and finally succeeded to have MAP revise the decision. The ministry said Svyazinvest companies may keep non-core assets, but financial accounting should be separated.
“At present the structure of services rendered by Svyazinvest subsidiaries is clearly dominated by the basic services. The companies of the holding are only beginning to play in the market of non-core services,” said MAP Deputy Minister Anatoly Golomolzin. He said restrictions had to be lifted to equal competition chances and stressed that all carriers should enjoy equal interconnection with public telephone networks.
“We are satisfied with the decision. The disposal of non-core business would have negatively affected the capitalization of our companies,” said Svyazinvest spokesman Oleg Mikhailov.
Russian wireless market experts believe the MAP decision will help Svyazinvest improve its investment attractiveness, as wireless and Internet businesses are currently the most profitable. However, they doubt the holding would constitute a major obstacle for the “big troika” of national wireless carriers in accessing the regional markets.
“Svyazinvest does not have enough experience to develop into a fourth powerful nationwide wireless carrier. Most likely its wireless assets will move with time to one of the existing carriers or a foreign investor,” said Anton Pogrebinsky from ACM-Consulting.
He stressed the “big troika” uniting Mobile TeleSystems (MTS), Vimpelcom (BeeLine) and Megafon is currently strong enough to expand to regional domestic markets without major problems. Therefore, “MAP’s decision will hardly tell on their expansion policy,” Pogrebinsky said.
In the meantime, the decision has already triggered a series of wireless purchases by Svyazinvest. The RTDC Holding, which holds stock in seven wireless carriers, announced the sale of three big regional GSM operators to Svyazinvest subsidiaries. VolgaTelecom is to buy 50 percent in Nizhegorodskaya Cellular Communications with more than 171,000 clients for an estimated US$20 million, while SibirTelecom acquired 49 percent in Yeniseitelecom, which has 70,000 clients, and another 49 percent in Baikalvestcom with 60,000 clients for US$12.5 million and US$8.5 million respectively.
