* Current CEO replaced after months of speculation
* Kalugin candidacy approved by presidential administration
* Rostelecom may decrease its mobile appetite after CEO
(Releads with CEO appointment, adds detail)
By Maria Kiselyova
MOSCOW, March 27 Russian state-controlled
telecoms operator Rostelecom named former cable TV
boss Sergei Kalugin as its new chief executive in a
government-forced leadership change.
The ex-head of National Cable Networks, which was owned at
different times by businessmen with connections to the Kremlin,
has replaced out-of-favour Rostelecom CEO Alexander Provotorov,
who has been under fire for months.
Provotorov came under pressure after a cabinet reshuffle
last May. The new government, formed after Vladimir Putin was
elected for a third Kremlin term, criticised Rostelecom's weak
share price and plans to expand in Russia's cut-throat mobile
Putin's spokesman, Dmitry Peskov, told Reuters earlier on
Wednesday that Kalugin's candidacy was agreed with the Kremlin.
Speculation that Provotorov may be on his way out emerged in
November when his home and the house of his former partner and
Rostelecom investor Konstantin Malofeyev were searched by police
in a fraud probe unrelated to Rostelecom.
The rumours flared again in early March when Malofeyev's
Marshall Capital Partners, which Provotorov used to run, sold
its 10.7 percent stake in Rostelecom to Arkady Rotenberg, a
construction tycoon close to Putin.
Kalugin has no apparent business links to Rotenberg, but the
latter has had common business interests with former owners of
National Cable Networks - metals tycoon Suleiman Kerimov and
banker Yury Kovalchuk. In 2011, the TV operator was acquired by
Kalugin will take over with immediate effect.
According to media reports, Provotorov will receive up to
280 million roubles ($9.06 million) in bonuses, including for
early termination of his contract which was due to expire in
Analysts welcomed the arrival of a proven communications
industry boss at the helm of Rostelecom, but were looking for
indications on his strategy for the company.
The former fixed-line monopoly was transformed in 2011 into
a universal operator by merging with several regional peers to
boost its presence in high-growth areas such as broadband,
mobile and Pay TV and offset declines in its core business.
Last summer, it was awarded an LTE mobile licence to offer
high-speed data downloads on mobile devices and rival
established mobile competitors MTS, MegaFon
and Vimpelcom which also were winners in the tender.
While officials have suggested Rostelecom should focus on
building out Russia's backbone Internet infrastructure,
Provotorov defended the mobile ambitions in a recent interview
saying growth in fixed broadband was flattening out, unlike
Kalugin has a good understanding of the fixed-line business,
said Ivan Kim, an analyst at VTB Capital. But as he lacks
experience in the mobile sector, Rostelecom is unlikely to be
aggressive in this market, he added.
The government owns 53 percent of Rostelecom which has a
market value of around $12 billion. The company is expected to
be privatised after a restructuring is completed and list its
shares on the London Stock Exchange.
It is in the process of merging with its state-controlled
shareholder, holding company Svyazinvest, absorbing its assets
and simplifying ownership structure, with the government set to
($1 = 30.8922 Russian roubles)
(Additional reporting by Darya Korsunskaya; Editing by Erica