Deutsche Bank and the Russian Direct Investment Fund (RDIF), the country’s sovereign wealth fund, are jointly investing RUB7.7 billion ($240 million) in Rostelecom, the Russian fixed-line operator which has an eye on building its mobile business in Russia.

As a result of the deal, the two investors will acquire 72 million ordinary Rostelecom shares, which is equivalent to a 2.7 per cent stake.

A statement from Rostelecom said the funds “will be directed towards both the company’s future development and to strengthening its market position”.

Back in August, it was reported the fixed-line operator wanted to become a bigger player in mobile services. Currently, it is the country’s fifth-largest mobile operator with 13.8 million connections (GSMA Intelligence, Q2, 2013 figures).

Rostelecom lags significantly behind the country’s three largest operators: MTS, Megafon and Vimpelcom.

However, there was speculation several months ago that Bank Rossiya might buy a stake in the fourth-largest Tele2 Russia business as a first step to selling the company to Rostelecom. Such a merger would create a much strengthened fourth player.

Subsequently, two companies representing Bank Rossiya did buy a 50 per cent stake in Tele2. However, Tele2 owner VTB claimed a Rostelecom takeover is unlikely.

The structure of the Deutsche Bank/RDIF deal involves Rostelecom signing call and put options to entitle it to a portion of any increase in share value if the share price rises. Investors will be protected if the share price falls.

The Russian government, which owns 55 per cent of Rostelecom, has said it wants to sell a controlling stake in the operator by 2016.