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UPDATE 2-MTS Turkmen licence to be suspended for a month

* Suspension to come into force Dec. 21

* Licence due to expire on Feb. 1, 2012

* MTS says no explanation given by authorities

(Adds licence expiration date, source on possible reason, background on relationship between Russia and Turkmenistan)

MOSCOW, Dec 16 (Reuters) - Russia's MTS MBT.N said Turkmen authorities would suspend its mobile licence for one month due to what a source said could signal Turkmenistan's wish to amend the terms of the underlying agreement.

MTS, Russia’s top mobile operator, said in a Thursday statement that the Turkmen Communications Ministry gave no reason for not providing a yearly extension to the 2005 agreement which underlies its right to work in Turkmenistan.

The licence, due to expire on Feb. 1, 2012, will be suspended for one month from Dec. 21, MTS said.

“It may mean that the Turkmen authorities would like to change the terms of the agreement,” a source close to one of the parties involved told Reuters.

The ministry was not immediately available to comment.

Russia and Turkmenistan are currently at odds after Russia refused in 2009 to increase gas purchases from the ex-Soviet Central Asian state which plans to triple gas output over the next 20 years and needs larger export markets. [ID:nLDE69R0S0]

MTS said Turkmenistan accounted for about 2 percent of its total revenue and 2.7 percent of its operating income before depreciation and amortisation in the first nine months of 2010.

“The company is currently considering all available options, including potential legal action, and shall vigorously defend its legal rights and investment interests,” said MTS.

“MTS management is taking active steps to clarify the situation but no explanation, including in relation to the alleged breaches by MTS, has been given by either the government of Turkmenistan or its ministry of communications.”

MTS, part of oil-to-telecoms conglomerate Sistema SSAq.LAFKC.MM, generated nearly $10 billion in 2009 sales. (Reporting by Maria Kiselyova; additional reporting by Anastasia Teterevleva in Moscow and Marat Gurt in Ashgabat; Editing by Jon Loades-Carter)

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