After Courting Controversy, Sweden's TeliaSonera Looks To Kazakhstan

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Swedish telecommunications giant TeliaSonera just can't get enough of Kazakhstan's mobile market.

After shelling out more than $1.5 billion for a 49 percent stake in KCell, Kazakhstan's largest mobile provider, earlier in 2012, TeliaSonera has spent another $200 million to acquire WiMax technology in the country. The purchase seemingly gives the company the inside track on providing 4G mobile technology in Kazakhstan.

The investment comes on the heels of the initial public offering (IPO) of KCell stock on December 12, 2012. TeliaSonera raised more than $500 million with the sale, and raised its ownership stake in the company to more than 60 percent. As the "Financial Times" notes, the original TeliaSonera purchase deal valued KCell at more than $3 billion -- $1 billion less than the December IPO valuation of just over $2 billion.

Beyond its struggles on the IPO market, 2012 was a tough year for TeliaSonera. The company attracted the ire of freedom of speech advocates for its dealings with less-than-democratic regimes. An investigative report by the Swedish TV program "Uppdrag Granskning" detailed how the company had been complicit in aiding the censorship efforts of autocratic regimes in Belarus, Azerbaijan, and elsewhere.

Later, the Swedish television station SVT aired a report which included anonymous testimony from TeliaSonera officials saying the company had paid hundreds of millions of dollars in bribes to secure the 3G wireless spectrum in Uzbekistan. The report tied the sale of the wireless spectrum to Uzbek President Islam Karimov's daughter Gulnara Karimova and an associate, Gayane Avakyan, who owns the Gibraltar-based firm Takilant, through which the illicit funds were reportedly channeled.

Swedish authorities are investigating the charges, which TeliaSonera has vigorously denied.

In a new twist to the case, the government of Uzbekistan has lodged a formal complaint with the Swedish Foreign Ministry over coverage of the case in Sweden -- including specific complaints about the prosecutor in the case, Gunnar Stetler [link to news report in Swedish]. The new report also claims that new e-mails have surfaced showing that TeliaSonera executives did, in fact, deal directly with Gulnara Karimova.

TeliaSonera has made no bones about investing in countries with less-than-stellar rights records. Uzbekistan, Azerbaijan, and Belarus are all ruled by regimes considered to be brutal and corrupt. Kazakhstan's record is not that much better, but the Swedish company has laid down a $2 billion bet that it can do business there.

Copyright (c) 2012. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

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Tags: teliasonera  Kazakhstan 

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