EEBC :.: Новости | Ukrainian Connection Has Interferences

As Kommersant found out, the attempt of the Moscow alternative operator Comstar to acquire second largest Ukrainian business-communication company Farlep fell through. The deal was canceled after the anti-monopoly organs already approved it. The representative of Ukrainian authorities announced that they will not accept appearance of the Russian monopoly in Ukraine’s telecommunication market.
The information about the acquisition deal between Comstar and owners of Farlep-Invest appeared in February, when Anti-Monopoly Committee of Ukraine approved it. Both sides kept the amount of the deal and conditions secret. The business analysts suggested that Comstar agreed to pay no less than $35-$40 million for 51 percent of stocks. This May the Comstar representatives were saying the deal is close to conclusion.

Yesterday, the Director of Comstar Semyon Rabovsky told Kommersant that the purchase of Farlep is frozen. This information was confirmed by Farlep as well. “The information about the purchase of corporate rights of Farlep-Invest, which is the main structure of telecommunication group Farlep, by the Comstar, was premature,” Sergey Tash’I, Director of the Legal Department of Farlep, said. “This information was based on successful preparation for the acquisition, including the approval from Anti-Monopoly Committee of Ukraine.” Both sides do not tell the reason for the deal failure.

According to the source, which was closed to the negotiations, after the approval of Anti-Monopoly Committee, the sellers of Farlep suddenly jacked the price up by 1.5 times. Comstar did not accept that.

The experts speculate that the main reason for the refusal of Farlep owners to finalize the deal was change of the authorities in Ukraine. After the “Orange Revolution” in December of last year and Viktor Yushenko taking the President’s office, a lot of Russian companies had encountered problems with entering Ukrainian market. “It looks like that somebody issued a decree “Do Not Sell!” Ukrainian assets to the Russian investors if there is another alternative present,” Alexander Malis, Vice-President of Korbina Telecom, explains. “It is clearly seen that the Ukrainian entrepreneurs are trying to sell their assets to a Western investors. If it does not work, they try to sell the business to our compatriots who became Western businessmen.”

Other participants of the market also see the preference changes in Ukrainian business environment. For instance, in the end of May Evgeny Chervonenko, Minister of Transportation and Communications of Ukraine, announced that he “does not want Russian monopolies in Ukrainian communication market.” He said that while commenting on the application of the national communication operator Ukrtelecom to receive the license for the cell connection services CDMA-450. The same application was submitted by the cell connection operator UMC, which fully belongs to Russian Mobile Telesystems. The Chervonenko statement meant that UMC would not get the license: the frequency of the CDMA-450 is only enough for a one network.

Farlep is the second largest alternative operator in Ukraine. By the end of 2004 the company was servicing about 100,000 subscribers in Kiev, Nikolaev, Odessa, Lvov and Dnipropetrovs’k. Last year the company sales reached $37 million. Farlep belongs to the holding company Farlep-Invest. Sergey Taruta, Farlep’s Chairman, and Oleg Mkrtchian, General Director of Industrial Union of Donbass, own 70 percent stock of the holding company. Makeevsky Machine Plant owns 12.08 percent of the Farlep-Invest shares.

According to the analysts’ opinion, the position of Ukrainian authorities threatens Russian operators with licenses’ denials and non-purchasable assets. For instance, Oksana Pankratova with iKS-Consulting thinks that participation of Russian companies in privatization of 42.86 percent of Ukrtelecom is questionable. Ukrainian government evaluates the Ukrtelecom’s privatization portfolio at $2 billion. Earlier, it was thought that two most likely contenders for the stock purchase were AFK “Sistema” and “Alfa Group.”

Russian operators of cell connections who already participate in Ukrainian market might also encounter problems. “In the beginning of August there was information that Prime-Minister Yulia Timoshenko order to issue a license to Ukrtelecom for the third generation cell connections. Most likely, the operator will get this license for free, despite the fact that in the end of 1990’s such licenses in Europe were sold for billions of dollars,” Pankratova says. “In given situation, it is not a fact that the UMC and half-Russian Kievstar would be able to receive similar licenses. The frequency resource for UMTS development is limited and it is not big enough for everybody.”

Source: www.kommersant.com