MegaFon Announces Audited Financial Results for the Year 2011

On March 1st, 2012 MegaFon, a Russian universal telecommunications operator, announced its consolidated financial results for the fourth quarter and twelve months ended December 31, 2011.

In 2011, MegaFon achieved impressive financial results and demonstrated strong revenue growth in all business areas. 

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MTS does not receive dividends from Turkmenistan

MTS failed to receive dividends from its Turkmenistani subsidiary, whose license was revoked by the local authorities, Interfax reported. The size of dividends was not disclosed, and it is not clear whether the dividends would have been for 2010 or accrued. The subsidiary’s net income for 2005-9M10 totalled USD 190 million, including USD 62 million for 9M10.

MTS CEO Mikhail Shamolin estimated the NPV of the loss from the termination of the Turkmenistan business at USD 585 million; the write-down on P&L might be USD 106 million. 

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Closure of Turkmen business can cause MTS US$600 million damage

On December 22, new information was published on the current conflict between the largest Russian mobile operator, MTS, and government authorities of Turkmenistan. Media reported that the Turkmen government had stopped MTS’ local subsidiary operations, Barash Communications Technologies, altogether and had revoked its service license starting 1 January 2011.

In addition, Turkmenistan unilaterally terminated lease agreements on cell sites with the operator starting the same January 1. Finally, Turkmen authorities obliged MTS to rescind contracts with all of its local subscribers, which number some 2.4 mn, and settle accounts with them. MTS has already laid an action against Turkmenistan at the International Arbitration Court. 

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MTS Group reports upside in the net income growth for 9M2010

MTS Group has recently reported its financial performance in 3Q and 9M2010. The report shows 16% growth y-o-y in 9M consolidated revenue, to USD 8.3 billion (accounting for the retrospective consolidation of Comstar, TS-Retail and Metrotelecom).

The group primarily owes the positive result to growth in proceeds from the provision of cellular telecoms services, which climbed 13.5% y-o-y, accounting for 79.8% of total revenue for the reporting period. The fixed-line telecoms sector saw revenue climb 29.3% y-o-y.

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Mail.ru Group plans to IPO on London Stock Exchange already this autumn

Vedomosti newspaper reported that Digital Sky Technologies (DST), controlled by Yuri Milner and Grigoriy Finger backed by Russian billionaire Alisher Usmanov, had split its Russian and overseas assets. As a result, the company’s domestic assets which included Mail.ru, the Odnoklassniki social network, ICQ (recently bought from America Online) and minority interests in VKontakte and OSMP and E-port payment systems, have been merged into a holding company called the Mail.ru Group. Overseas assets, including shares in Zynga, Groupon and 10% in Facebook, have been spun off into DST Global. The restructure was in the run-up to an IPO of Mail.ru Group on the LSE, due in October 2010. Shareholders value the company at USD 5-6 bn.

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Svyazinvest to acquire Akado for US$630-650 million

Various newswires had reported that Svyazinvest had come to an accord with Victor Vekselberg and Yuri Pripachkin, owners of one of Moscow’s largest cable TV and broadband internet access operators, Akado, about the sale of the latter to Center Telecom. The company was priced at US$630-650 million, net of a US$350 million debt, and is presently undergoing due diligence.

The transaction has a dual phase scheme and allows for an option. At the first phase, Svyazinvest is to acquire up to 50% of Akado shares in exchange for cash, shares of Center Telecom subsidiaries and, what is less likely, Rostelecom shares. In the second phase, the remaining portion of Akado equities could be acquired by united Rostelecom.

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