Megafon acquires Internet and cable TV provider in Western Siberia--Dec 13, 2011

MegaFon, a major Russian mobile operator, made a further step last Friday towards business diversification and regional expansion by acquiring Yugratel, a broadband Internet and cable TV provider operating in the Khanty-Mansiysk Autonomous District of Western Siberia.

Yugratel was sold through an auction sale by the local authorities for 2.4 billion rubles, or approximately $76 million.

Yugratel is a relatively small player in the region, with 28,000 customers, or 11% of the local market, far behind Rostelecom’s 49% market share. But Yugratel enjoys a healthy financial situation with a net profit amounting to 129 million rubles, or $4.1 million in 2010 along with a good future earnings potential, the Russian online publication ComNews.ru quoted experts as saying.

The Russian antimonopoly authorities did not allow Rostelecom, Russia’s national telecom operator, to take part in the auction.

MegaFon, which has ambitions to become a ‘universal telecom operator,’ has made some notable acquisitions over the past few years. Among the most recent ones, earlier this month, was Luchshe.net, a broadband operator that provides services in Kursk under the SVOЁ trademark.

In November, the company announced the acquisition of broadband Internet access providers Internet Center and Svyazinform, which serve more than 60,000 customers in Chuvashia under the Chebnet brand.

In June, Megafon acquired St. Petersburg Internet provider Web Plus, and NetByNet, a fixed broadband Internet, digital TV and IP telephony operator operating in Moscow and a number of regions.

In 2010, MegaFon acquired Synterra, a company with a large terrestrial and satellite telecommunications infrastructure.

MegaFon Acquired Scartel

Shareholders of MegaFon approved acquisition of Scartel (Yota brand) with which the company has been collaborating more than a year in LTE through the MVNO service.

The acquirer hasn’t yet decided on how exactly Scartel will be integrated into MegaFon, so some particular
networks owned by Scartel may be acquired even before the deal is closed, communicated to the media MegaFon CEO Ivan Tavrin.

As ComNews reported earlier, in the beginning of August MegaFon’s Management Board approved acquisition of 100% shares of Scartel from Garsdale Services Investments holding (controlled by tycoon Alisher Usmanov) which both companies make part of, for US $1.18 billion. Rostec and TeliaSonera also stood for this merger as a result of which MegaFon will undertake Scartel’s US $600 million indebtedness.

MegaFon will be paying for Scartel’s assets by instalment. “Half of the amount in question – US $590 million plus a 6% annual interest from the moment the deal is closed until the date of the payment will be paid one
year after the deal closure, and the remaining US $590 million plus a 6% annual interest will be paid up in two years”, said a release from MegaFon. Ivan Tavrin also mentioned that the volume of assets and
liabilities wouldn’t change compared with the fi gures as of the date of deal closure.