It's time to take a break from writing about the rumoured sales of Zain's African assets to Vivendi (or whichever potential buyer is the flavour of the day), although I daresay there will be cause to return to that theme before too long.Instead, I wanted to take the opportunity to take a look at a part of the world about which I got to learn a little while producing three annual iterations of a conference for telecoms execs from the former Soviet Republics of Central Asia and the Caspian region. One of these countries, Azerbaijan, is, according to recent local reports, moving closer to making 3G mobile licence awards, with the the Ministry of Communications and Information Technologies planning to distribute spectrum by the end of this year.
This is apparently not the Ministry's first attempt to bring 3G services to Azeris. According to a brief TeleGeography report, the MCIT submitted a 3G frequency use proposal to the country's cellcos in July 2008, "but few developments have emerged since."
Now, according the the Minister, Ali Abbasov, all the three of the country's GSM operators have already applied to the Ministry for 3G licences. These three operators are: Azercell, Bakcell and AzerFon (brand name: Nar Mobile), with market shares of 58.66%, 22.29% and 18.00% respectively as of March 2009, according to WCIS. A fourth player, CDMA operator CATEL/FONEX has just over one per cent of the country's mobile subs.
Given that oil-rich Azerbaijan is potentially quite an attractive market, it is striking that only one of these operators is associated with a significant multi-country group - market-leading Azercell is controlled by Fintur Holdings, a joint venture between giant Scandinavian telco TeliaSonera and Turkey's Turkcell. Fintur Holdings, via a mix of majority stakes and management control arrangements, is also active in Kazakhstan, Moldova, Georgia, Uzbekistan, Tajikistan, Cambodia and Nepal.
Strikingly absent from the Azeri market are big Russian cellcos, two of which, Vimpelcom and MTS, have each built a multi-country footprint across other parts of the former Soviet Union. This may be set to change, if recent comments from the latter company's CEO are interpreted as representing a firm commitment to further international expansion.
Speaking to Reuters on the sidelines of the of the St Petersburg Economic Forum earlier this month, MTS CEO Mikhail Shamolin said "there are two countries (where) we are not present yet and I believe we should be present... Kazakhstan and Azerbaijan."
Shamolin added that MTS is not thinking in terms of start-up operations in either country, which seems sensible given that mobile penetration in Azerbaijan and Kazakhstan stand at 71.11% and 93.81% respectively according to WCIS. "We are looking at acquisition opportunities there," said Shamolin. "We are waiting until the right time comes. When this opportunity shows up then we will consider it carefully." He added that the company was not holding specific talks with any Kazakh or Azeri firms.
In Azerbaijan, you would have to guess that TeliaSonera and Turkcell will look to hold on to their market-leading MNO. So let's see which of Bakcell or Nar Mobile might be targeted for an MTS takeover.
Posts
The article is interesting. However Russian cellcos coming at Azeri market is not linked with 3G licenses /
ReplyDeleteMr. Shamolin said. "We are waiting until the right time comes.
What can be the right time?
1) Russian cellcos interest to Azeri mobile depends on the status of political relationships between RF and Azeri, the closer are the relationships the closer the moment of acquisition, the cooler the relationships the closer Turkish or American shares ( like Finture or other)
2) the close relationships with Min IT &Telecommunications the easer to get the joint deal
3) and finally 3G is not the key issue due to outdate technology. It was a time for 2005-2006. Now the time is for 4G , LTE or for WiMax
When number 1, 2 and 3 are together it can the right time for purchasing Azeri mobile shares