Russian state-owned operator Rostelecom reportedly entered talks to buy rival MegaFon as the latter’s parent USM Group seeks to exit the telecoms market, local newspaper Kommersant reported.

Citing a source close to the government, Kommersant reported Rostelecom submitted an offer for MegaFon at the end of 2022, a move which has only just come to light, although there are apparently other interested parties outside of the telecoms sector.

MegaFon data places its subscriber count at 70 million.

Strong Rostelecom
Another outlet reporting on the potential tie-up, bne IntelliNews, suggested the Russian government is increasingly looking to rely on Rostelecom for infrastructure and advancing technology projects, so a merger with MegaFon would make sense.

A beefed-up Rostelecom would be particularly beneficial for the country, considering operator group Veon and vendors Ericsson and Nokia are in the process of  withdrawing from Russia due to its war with Ukraine.

At the turn of the year, USM Group founder Alisher Usmanov moved to consolidate all of his telecoms assets, including mobile payment company Inplat, AI-based analytics company OneFactor and software developer Nexign, with MegaFon.