Russia's MTS to Return to Uzbek Market Following Dispute Settlement
Published on: 3rd Aug 2014
Russia's MTS has settled its long running dispute with the government of Uzbekistan, and plans to resume mobile services in the country, in a joint venture with the government.
The signed agreement provides for establishment of a joint venture with MTS holding a 50.01% of the company, giving it management control. The joint venture will operate on the basis of assets, equipment and infrastructure, which were previously owned by Uzdunrobita, a former subsidiary of MTS in Uzbekistan, and which will be transferred to this newly established joint venture.
The settlement comes a couple of years after MTS wrote off most of its USD1.1 billion investment in the country, when the government seized Uzdunrobita's assets and shut-down the network.
The parties intend to finalize all procedures stipulated in the settlement, and to ensure commercial launch of the mobile network by the end of this year.
According to the settlement agreement, the authorities of the Republic of Uzbekistan will grant the new operator 2G, 3G and LTE licenses, provide necessary frequencies and numbering capacity, ensure lease agreements for communication channels and issue all permissions required for the joint venture to operate and offer full telecommunications services throughout Uzbekistan.
Within the scope of fulfillment of the terms and conditions set out in Settlement agreement and transfer of a stake in the operator to MTS the parties will submit a joint application to discontinue ongoing legal proceedings in the International Center for Settlement of Investment Disputes, Member of the World Bank Group (ICSID).