Russian Government May Buy Svyazinvest Stake

Russia's telecoms market faces a shake-up after further details emerged that could result in conglomerate, Sistema swapping a quarter of landline firm, Svyazinvest and half of CDMA operator, SkyLink for a 23% stake in Moscow landline operator, Moscow City Telephone Company (MGTS) along with the cancellation of debts of around US$826 million owed to Sberbank.

The Russian business daily, Kommersant reported the story, citing a governmental source and it follows on from reports last week that Svyazinvest is planning to merge its existing mobile networks.

Svyazinvest is a holding company that manages various landline networks and owns thirteen mobile regional networks, although none of them have a license covering the lucrative Moscow region. The company is 75 percent minus one share owned by the government. The remainder is held by landline operator, Comstar which is owned by Sistema - which itself owns 52.8% of rival mobile operator, MTS.

If completed, the deal would give the government 100% ownership of Svyazinvest, while Sistema would walk away with its stake in MTS intact and the ability to merge landline operators, Comstar with MGTS.

Posted to the site on 8th July 2009