Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Alfa Telecom Says Svyaz Sale Is Premature

The privatization of fixed-line telecoms holding Svyazinvest is premature, the head of Alfa Telecom -- a potential Svyazinvest buyer -- was quoted as saying in a newspaper report on Monday.

The government plans to sell its stake of 75 percent minus one share in Svyazinvest either this year or next.

IT and Telecommunications Minister Leonid Reiman has said Svyazinvest, which controls seven regional telecoms and long-distance monopoly Rostelecom, should bring in $3 billion.

"If Svyazinvest was better run and there was more effective management and control by the state, the capitalization of the holding company might reach western standards -- $600 to $700 per fixed line," Anatoly Protsenko, head of Alfa Telecom, part of the diversified Alfa Group, told Vedomosti. "Then the state's revenue from privatizing 75 percent of the shares with a premium for control and for mobile phone assets would be more than $30 billion."

He said the sale might fetch $3.5 billion to $4 billion.

Svyazinvest was set up in 1994 to ensure that the whole country had access to the telephone network, to modernize the network and to bring in new technology, Protsenko said. "To say that these tasks have been carried out is, to put it mildly, premature."