Russia-based operator MTS said the operating licence of its subsidiary in Uzbekistan (Uzdunrobita) has been suspended for an additional three months, stating that “in the company’s opinion, the rights of MTS as a foreign investor have been gravely breached”.

It said that “in order to clarify the situation and start constructive discussions” it had sent a number of official letters to the leaders of the country, “all of which remain unanswered”.

According to Reuters, the dispute stems from a US$1.3 million back-tax claim against MTS, which although settled, led to a series of audits of its financial and operating activities.

In a statement, the operator said that the Uzbek business “has been subject of regularly scheduled audits of the financial and economic activities both prior to and since its acquisition by MTS in 2004. At no time did any audit reveal any significant violation by Uzdunrobita of the laws of Uzbekistan, in particular with respect to tax, foreign exchange and licensing requirements”.

MTS first had its licence suspended on 17 July 2012 for a period of 10 business days, stating at this time that it believed this was “without proper basis and constitutes a breach of MTS’ rights under local and international law”.

It said that the actions came “in conjunction with synchronous inspections of the company by several supervision agencies…complemented with the use of intimidation, including the detainment and arrest of employees of Uzdunrobita, all of which can be interpreted as an unwarranted attack on the business of a Russian investor”.

In the full year 2011, the Uzbekistan business accounted for around 3.6 percent (US$441 million) of MTS’ total revenue (US$12.32 billion). During the year, it saw a drop in its subscriber base due to the introduction of a new accounting method, “in light of a new policy on taxation of subscriber base”.

Reuters said that analysts believe that if MTS should leave Uzbekistan, it would need to write-off around US$800 million, following an investment of US$1.1 billion in the country.

MTS recently announced the resolution of a dispute in neighbouring Turkmenistan, and it has now “received licenses and obtained legal and technical conditions for operations in the country”.

Under a new five-year agreement, the company will pay 30 percent of its net profit on a monthly basis to TurkmenTelecom, the state-owned telecoms provider.

It has also been allocated GSM and 3G licences for a three-year term.