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TELENOR

Tycoon edges Telenor in Vimpelcom race

Russian billionaire Mikhail Fridman's Altimo firm said Wednesday it had become the biggest shareholder in mobile phone operator Vimpelcom after a $3.6 billion deal with Egyptian tycoon Naguib Sawiris, beating out Norway's Telenor.

The announcement raises the voting shares held by Altimo to just above that controlled by its Norwegian rival Telenor and extends a bitter feud for control of a company with the world's six-largest mobile subscriber base.

The telecoms investment branch of Fridman's Alfa Group said it acquired the 14.8 percent stake from the Egyptian investor's Weather company and bought additional shares on the open market to raise its holding to 40.5 percent.

That just edges the 39.5 percent Norway's global wireless operator achieved earlier this year thanks to a deal with Sawiris that is now being contested by Russia's anti-monopoly authorities.

The New York-listed Vimpelcom Ltd. — famous for the brands Beeline and Wind — closely trails MTS and MegaFon in Russia and is a strong presence on the Italian market.

It reported a jump in second quarter profits to $488 million on Wednesday thanks to favourable currency exchange rates and continued revenue growth in its Russian divisions.

But the company has seen its stock take a 25-percent hit in recent months as court battles leave management stranded and forced to defer lucrative dividend payments to investors.

The Financial Times said Wednesday that the legal battles had also forced Vimpelcom to indefinitely postpone a planned European listing that was aimed primarily at broadening its investor base.

Yet Vimpelcom's American Depository Receipts (ADRs) were still ending a volatile day of New York trading up more nearly 10 percent on news of the Altimo deal.

Investors appeared to be banking on the idea that a truce will soon settle over the company that sees Telenor and Fridman's unit share an equal number of board seats and in effective joint control of the firm.

It was not immediately clear how Telenor intends to respond to the latest move by one of Russia's original and most powerful oligarchs — a man who has previously challenged the Kremlin over a big Arctic oil deal and won.

The Norwegians have fought with Fridman over Vimpelcom's operations in Ukraine and its current struggles in Russia have become a part of official government contacts between Moscow and Oslo.

But Fridman's latest business move is in step with Russian government thinking that would see mutual operation of Vimpelcom by the two enemy camps.

Thursday's edition of the Kommersant business daily said Russia's Federal Anti-Monopoly Service (FAS) had come up with four-point peace pact under which Telenor would not fight Fridman's efforts to win parity ownership in Vimpelcom.

The accord — terms of which would in turn approve the Norwegian's own acquisition of the Egyptian tycoon's 11.4-percent stake — would also require Telenor to agree to a Russian chief executive for the phone operator.

Kommersant said that Prime Minister Dmitry Medvedev's official spokeswoman Natalia Timakova had confirmed the outlines of the proposed compromise.

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TELENOR

Norway’s Telenor sells out of India as tycoon weighs in

Indian telecom giant Bharti Airtel will buy the local operations of Norway's Telenor, it said Thursday, as the ultra-competitive mobile market is shaken up by the country's richest man.

Norway's Telenor sells out of India as tycoon weighs in
Former Telenor CEO launching the company's ill-fated India business in 2009. Photo: peerdahl/Wikimedia Commons
Tycoon Mukesh Ambani launched Reliance Jio's 4G network in September with an audacious free service for the rest of 2016, followed by vastly cheaper data plans and free voice calls for life.
 
The move forced rivals to slash their tariffs and scramble to match the deep pockets of Jio, which is backed by Ambani's vast energy-to-chemicals conglomerate Reliance Industries and picked up 100 million subscribers in its first six months
   
Bharti's acquisition is the latest movement towards consolidation in India's telecoms sector as major players try to position themselves to best face the tough new environment.
   
The move, which still needs to be approved by regulators, will enhance its coverage, the company said in a statement to the Bombay Stock Exchange (BSE), and see Telenor exit India.
   
“The proposed acquisition will include transfer of all of Telenor India's assets and customers, further augmenting Airtel's overall base and network,” the Indian firm said in the statement.
   
Last month British mobile phone behemoth Vodafone announced that it was in talks to merge its Indian unit with Mumbai-based Idea Cellular in its own move to counter Jio's rise.
   
That deal would create India's largest telecoms company. Global brokerage firm CLSA estimated that the pair would command a combined 43 percent share of market revenue, ahead of Airtel, which is currently the market leader, on 33 percent.
 
Reliance Communications — owned by Ambani's brother Anil Ambani — and Tata Teleservices, part of the sprawling salt-to-steel Tata conglomerate, are also reportedly in talks to join forces.
   
Reliance merged with telecom operator Aircel in September last year. Bharti Airtel's shares surged more than five percent in Mumbai morning trade following the Telenor deal announcement.
   
“The decision to exit India has not been taken lightly,” Sigve Brekke, Telenor Group CEO, said in the statement.
   
“After thorough consideration, it is our view that the significant investments needed to secure Telenor India's future business on a standalone basis will not give an acceptable level of return,” he added.
   
Telecoms analyst Baburajan Kizhakedath said Telenor was quitting India because the intense competition meant there was no scope for growth. “The Airtel-Telenor deal is probably the best exit route for Telenor,” he told AFP.