Rostelecom may be privatised in 2015 - minister

MOSCOW Wed Dec 19, 2012 9:32am EST

MOSCOW Dec 19 (Reuters) - The long-expected privatisation of Russian state-controlled telecoms operator Rostelecom will be possible in 2015, communications minister Nikolai Nikiforov said.

Nikiforov, speaking to reporters on Wednesday, did not say what size stake could be put up for sale. Rostelecom is 53 percent controlled by the government.

The former fixed-line monopoly has been beefed up recently by a merger with several regional operators aimed at boosting its share of lucrative market segments such as mobile, broadband and pay-TV, and offsetting declines in its core business.

But since a government reshuffle following the presidential election this spring, Rostelecom's management has come under fire regarding its investment programme.

Nikiforov said he believed the government should not interfere with Rostelecom's "operating activity" but added there were questions regarding the efficiency of its multi-billion-rouble expenditures.

Government leaders want Rostelecom to focus on building out Russia's internet infrastructure and not to expand its mobile presence even after the company recently won a fourth-generation operating licence.

The mobile market is too competitive to make a maximum return, Nikiforov said.

MANAGEMENT UNDER PRESSURE

The homes of Rostelecom CEO Alexander Provotorov and minority shareholder Konstantin Malofeev were recently searched as part of a fraud probe unrelated to Rostelecom, fuelling speculation Provotorov may be ousted from his post.

Reports suggested he may be replaced by Vadim Semyonov, the CEO of Rostelecom's state-controlled shareholder, holding company Svyazinvest, which is in the process of merging with Rostelecom.

Dmitry Strashnov, who this week stepped down as the CEO of Swedish telecoms group Tele2's Russian unit, has been named as another possible candidate to take over at Rostelecom.

Russian media have speculated that Tele2 could seek control in a merger of the mobile assets of its Russian unit and those of Rostelecom.

Deputy Prime Minister Arkady Dvorkovich, who has a broad remit covering industrial policy, said in October Rostelecom should focus on providing the backbone of Russia's internet infrastructure.

He also called at the time for change in Rostelecom's management. Speaking to Reuters on Wednesday, Dvorkovich stood by those comments but declined to be drawn on which candidate he would like to see heading the $12 billion business. (Reporting by Anastasia Teterevleva; Writing by Maria Kiselyova; Editing by Douglas Busvine and Mark Potter)

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