Tele2 buys Kazakhstan stake for $77m

ASTANA. december 19. KAZINFORM. Swedish alternative operator Tele2 has bought a controlling stake in Neo, a mobile operator in Kazakhstan; Kazinform cites Kazakh Embassy to the USA referring to Global Telecoms Business.
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Comment: Tele2 has been steadily withdrawing from western European markets over the past few years - it has just sold its French operation to Virgin Mobile - and expanding its operations in faster growing markets. Kazakhstan, for its size, still has relatively little competition.

Tele2 has acquired a 51% stake in Kazakhstan mobile operator, Neo, for $77.3 million.

The Swedish alternative telecom operator will inject an additional $50.6 million to help Neo secure a 20% share of the third-largest market in the Commonwealth of Independent States. The deal is likely to close early in 2010.

Tele2's rivals in Kazakhstan, TeliaSonera and VimpelCom, have a market share of 45% each.

Harri Koponen, president and CEO of Tele2, said: "The acquisition of a mobile operation in Kazakhstan goes hand in hand with our ambition to carefully look for complementary assets in or close to our mobile footprint."

Tele2, after the initial purchase, can buy the remaining 49% of Neo in five years from a private investment group, Asianet Holdings.

The Stockholm-based company could consider expansion into Central Asia later, but will focus on the business in Kazakhstan at present. Tele2 is also planning to raise its dividend in fiscal 2009 by 10% and will also offer a special dividend at its 2010 annual general meeting.

"Given the proximity of the Kazakhstan asset to other Tele2 operations, this acquisition should provide the potential of synergies deriving from the replication of our successful operational model," said Koponen.

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