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. Last Updated: 07/27/2016

MTS Warns Rival Off Kyrgyz Deal

Mobile TeleSystems has warned rival VimpelCom and its shareholder Telenor against buying a phone operator in Kyrgyzstan, whose assets it disputes in court.

MTS has sent letters to VimpelCom and Telenor saying it may take legal action against whoever buys Sky Mobile, a unit of billionaire Mikhail Fridman's telecoms arm Altimo. Altimo is the biggest investor in VimpelCom.

According to MTS, Sky Mobile bought the former assets of Bitel, a Kyrgyz phone company whose offices MTS says were seized in 2005 by people linked to Altimo, three days after MTS said it bought control of the company. Altimo denied wrongdoing.

MTS is already suing Altimo for at least $150 million over the Bitel takeover. It says that Altimo is offering to sell Sky Mobile.

Telenor spokeswoman Anna Ivanova-Galitsina declined to say whether the company got the letter or comment any further. Altimo vice president Kirill Babayev said he would not comment before he saw the letter.

VimpelCom CEO Chief Alexander Izosimov called the litigation around Sky Mobile "a soap opera." "Altimo says one thing, MTS says something totally different," Izosimov told reporters.

"If there is a possibility to enter the Kyrgyz market in any way, through an acquisition or a license, then it is a very interesting market for us," he said. "But any acquisition or getting a license has to be clean enough, as we don't want to get bogged down in legal disputes."