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. Last Updated: 07/27/2016

Tele2 Sells Irkutsk Unit for $1.6Bln

STOCKHOLM -- Sweden's Tele2 said Monday that it was selling operations in the Irkutsk region to VimpelCom for about 1.6 billion Swedish crowns ($236 million), but that it still planned to expand in Russia.

Tele2, a pan-European telecoms operator, said in a statement that the sale of the northern Russian operations would have a positive one-off effect of about 1.2 billion crowns on its earnings.

Johnny Svedberg, executive vice president of operations for Russia and the Baltic states, said the sale should not be seen as a change in Tele2's strategy to expand in Russia.

"On the contrary, we expect to make additional acquisitions in the Russian market during the remainder of the year," he said in the statement.

The company said it had also signed a 10-year roaming agreement with VimpelCom, a deal it said was directly linked to the divestment.

"I think that it looks a bit cheap," said Urban Ekelund, analyst at Redeye, of the sale of the Irkutsk operations. "But it depends what the roaming agreement is worth."

Another analyst, who asked not to be identified, said he thought Tele2 had secured a good price.

"What they have a little problem with in Russia is getting new licenses, and in order to grow, they need new licenses," the analyst added. "They are going to buy into firms that have licenses in regions where they don't have a presence themselves."