MOSCOW, July 22 Russia's biggest mobile phone
operator MTS is in talks to acquire a 49 percent stake
in cellphone retailer Svyaznoy, business daily Kommersant
reported on Tuesday.
MTS denied the report. "MTS is not planning to buy shares in
Svyaznoy. And it is not in talks," a spokesman said. He added
the company was not even considering such a deal.
According to one of Kommersant's sources, the deal could be
closed "in the nearest future" while the other source that the
paper quoted said it was unlikely to be completed before
Svyaznoy owner Maksim Nogotkov has been trying to bring in
investors for years, with mobile operators and unrelated
businesses alike reportedly considering taking a stake.
According to Kommersant, Svyaznoy, which generated $3
billion in revenues last year, could be valued at $1.5 billion
A deal could help to increase the number of MTS' retail
outlets to beat rivals Megafon and Vimpelcom,
although MTS already has a partnership agreement with Svyaznoy
which gives it advantage over its rivals in the Svyaznoy chain.
"Acquiring a stake in Svyaznoy would only be value-accretive
for MTS if the price is right, as retaining high-income
customers is more important than attracting new ones at this
stage in the development of the Russian mobile market," said
analysts at Uralsib.
Russian mobile phone subscriptions stand at 241.5 million at
the end of March, equal to 169 percent of the population,
because many people own more than one SIM card.
MTS's controlling shareholder conglomerate Sistema
declined to comment.
($1 = 35.0500 Russian Roubles)
(Reporting by Maria Kiselyova, editing by Louise Heavens)