Turkcell to buy 80% of Byelorussian Telecommunications Network

Turkcell to buy 80% of Byelorussian Telecommunications Network

The local operator BeST will be sold to the Turkish Turkcell Company. According to experts, the Byelorussian president Alexander Lukashenko has taken such a decision to ‘frighten’ Russia by Byelorussia’s possible rapprochement with NATO countries.

The Turkish mobile operator Turkcell has agreed to buy a 80% stake in the Byelorussian third largest mobile operator – Byelorussian Telecommunications Network (BeST), a source close to the republican government tells Prime-TASS. According to the source, the transaction has been approved at the highest political level. Turcell will pay for the transaction in three tranches, the last tranche maturity date coinciding with the first profit received by BeST.

Both BeST and the Byelorussian Ministry of Communications and Informatization say to know nothing about the mentioned above transaction. At the same time a source close to one of Turkcell’s shareholders confirmed reaching an agreement regarding the given transaction. According to the source, the transaction structure is rather complicated, while the total transaction charge reaching about $500 mln. Earlier, on April 11, Turcell reported the company’s board of directors held to make a purchase proposal to BeST shareholders.

BeST is the third largest Byelorussian cellular operator. Late last year the company was servicing 180 thousand subscribers, which accounted for 2.5% of the republic total subscriber base. BeST shares are divided between two state enterprises: the Automation Research Institute (75%) and Beltelecom (25%). The mobile communication penetration reaches 72% in Byelorussia.

Till recently the Russian mobile operator Vimpelcom has been considered the principal claimant for BeST. Vimpelcom has been scrutinizing Byelorussia since 2004, when one of the Russian operator’s shareholders – the Alfa Group – was expected to win the tender for GSM licences in the republic. However, in the last minute the tender was cancelled for the resolution of the Byelorussian President Alexander Lukashenko, and the licence was granted to BeST founded at that time.

Last year Vimpelcom and Alfa were negotiation the acquisition of the second largest Byelorussian operator Mobile Digital Networks (Velcom trademark). However, finally the company was acquired by Telecom Austria. The decision to sell the company to the Austrians was also made by Mr. Lukashenko in person. As the Byelorussion authorities do not intend to grant new cellular licences, the only option for Vimpelcom to enter the Byelorussian market was BeST privatization. But, the Russian Company is not be able to participate in the given process. However, one of Turkcell’s shareholders is the mentioned above Alfa Group, which is currently trying to expand its share to the controlling one in the Turkish company through court.

‘Deciding to sell BeST to the Turkish company, Mr. Lukashenko is pursuing two targets, - says Yuri Bryukvin, director general of the analytical agency Rustelecom. – First of all, he seeks to be allowed to visit Turkey. Currently most western countries are closed for Byelorussian officials. Secondly, he wishes to demonstrate the possible Byelorussia’s rapprochement with NATO countries (Turkey is the NATO member) and thus to attempt to increase donations made by Moscow’. At the same time, according to Mr. Bryukvin, the price of $500 mln for BeST seems overestimated: ‘The transaction charge should be high to transfer it into a PR campaign, but it is likely to comprise some preferences and promises’.