Ukrtelecom controlling stake goes to Ukraine’s richest man

Ukrtelecom controlling stake goes to Ukraine’s richest man

06 JUN 2013

Ukraine 3G licence holder and fixed-line monopoly Ukrtelecom is to come under the control of a company controlled by Rinat Akhmetov, the country’s richest man.

SCM Group’s acquisition of a 92.79 per cent stake in Ukrtelecom from Austrian investment group EPIC adds to Akhmetov’s telecoms business, which already includes a minority stake in Ukraine number-three operator Life, which is co-owned by Turkcell.

Financial Times sources put the acquisition price at approximately $1.3 billion, the amount paid by EPIC to acquire the stake in the 2011 privatisation process. The transaction still needs to be approved by antitrust regulators.

Ilya Arkhipov, the managing director of SCM Advisors, said the group hopes to use its experience and synergies with its other telecom businesses “to offer new products and services to the existing customers, to attract new clients and build a more advanced telecommunication infrastructure in Ukraine”.

SCM’s acquisition of Ukrtelecom could potentially bring nationwide high-speed mobile broadband based on WCDMA technology to Ukraine for the first time.

Ukraine mobile market leader Kyivstar is co-owned by Telenor and Russia’s Alfa Group and had 27.5 million connections at the end of the first quarter of 2013, according to Wireless Intelligence. The local subsidiary of MTS has 20.8 million connections, while  Life has 11.1 million.

Alexander Valchyshen, head of research at Kiev-based investment bank Investment Capital Ukraine, is quoted by the Financial Times as saying the move is the latest example of Ukraine’s oligarchs shuffling old Soviet assets at “hefty discounts” rather than investing in R&D.

However, SCM Group said the acquisition “will not limit competition in Ukraine’s telecom market” and that it invested $2.2 billion in upgrading the country’s industrial infrastructure to compete in global markets and improve services and products available to Ukrainians.

Akhmetov also controls around half of Ukraine’s steel, ore, coal and thermoelectricity sectors following state privatisation and secondary market acquisitions.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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