Russia's new defence minister offers to return 4G licence

MOSCOW Fri Feb 8, 2013 6:24am EST

MOSCOW Feb 8 (Reuters) - Russia's newly appointed defence minister offered to return a 4G licence awarded to Osnova Telecom, 25 percent-owned by the ministry, under his predecessor Anatoly Serdyukov who was sacked by President Vladimir Putin in November.

Osnova was founded in 2010 under Serdyukov, who is a witness in an investigation into a suspected $100 million property fraud involving a defence ministry company.

Russia's regulator allocated 4G frequencies to Osnova in 2011, bypassing top three mobile operators: MTS, Vimpelcom and MegaFon. They were awarded licences last summer, taking up all available spectrum and beating out smaller competitors such as Tele2.

Now Osnova's rights to the frequencies, used to provide fast mobile broadband, look likely to be re-allocated by auction.

The Defence Ministry owns 25 percent plus one share in Osnova Telecom through state company Voentelekom. The remaining stake is held by Icominvest, a company owned by Vitaly Yusufov, the son of former Energy Minister Igor Yusufov.

Vitaly Yusufov could not immediately be reached for comment.

Osnova has not built its 4G network yet, while its rivals are already investing in the roll-out which is expected to cost them a total of 420 billion roubles ($14 billion).

In a letter to Putin, Defence Minister Sergei Shoigu said he saw it as inexpedient to build a 4G network, a spokeswoman for the ministry said. The letter had received a positive response, she said.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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