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Abandoned Geocell With Misty Future

Corruption scandal in Uzbekistan has made TeliaSonera withdraw from Georgia and the CIS markets by alienating its own operators and shifting a focus on the EU market.

Farewell to Eurasia

Swedish-Finnish TeliaSonera has decided to withdraw from the Eurasian small market that mainly unites the CIS member countries. The company’s board of directors has preferred to shift a focus onto the Swedish and other European markets.

Jointly with Turkish Turkcell and Fintur holdings, Finnish Sonera launched expansion to the CIS countries at the beginning of the 2000s. The Turkish company transmitted the following controlling packages to Sonera: Azercell (Azerbaijan), Geocell (Georgia), Moldcell (Moldova), Kcell (Kazakhstan). In 2011 Sonera merged with Swedish Telia and set up TeliaSonera.

In 2003 TeliaSonera acquired a controlling interest in Fintur Holdings. In 2007 the company bought operators in the former Soviet counties: Coscom (Uzbekistan with trademark of Ucell) and Tcell holding (Tajikistan). In 2008 TeliaSonera acquired Kazakh holding Visor, a mobile operator from Nepal and Cambodia, but sold the Cambodian company soon.

Sales Leaders

TeliaSonera is saying a goodbye to mobile operator markets in seven countries, including five countries in the CIS space, Georgia and Nepal. The cell operators that are owned by TeliaSonera are market leaders in Tajikistan, Azerbaijan, Nepal and Kazakhstan and rank second in Moldova, Azerbaijan and Georgia due to the quantity of subscribers.

The Scandinavian company has not yet divulged schedules for alienating these operators. The Eurasia-based operators earned 20.5 billion Crones in 2014, 2.5 billion USD, that is a 20% ratio in total revenues of TeliaSonera Group that served 45 million subscribers at the end of the year, that is, 60% in total number of its subscribers.

The corruption scandal has led TeliaSonera leave the CIS countries and Georgia, but the company maintains a stake in Russian Megafon.

For the last 2 years, the company has performed worthy job for improving service quality in the Eurasia space, including in terms of transparency and reliability, TeliaSonera director general Johan Dennelind said.

“We believe other bodies will ensure long-term development of these assets. We will benefit our stakeholders and subscribers by making focus on the European market”, Dennelind pointed out.

Having left the Eurasian markets, TeliaSonera will maintain cell operators in Scandinavian countries (Sweden, Finland, Norway, Denmark), Spain and Baltic Countries (Lithuania, Latvia, Estonia). Moreover, the company will maintain stakes in Russian Megafon and Turkcell and there are no plans for sales of these assets, the Scandinavian corporation representatives Henrik Westman noted.

Corruption Trails

An entrance of TeliaSonera to Kazakhstan triggered counter-corruption scandal.  According to the spread information, with the aim to purchasing the domestic operator Coscom the Scandinavian company paid 250 million USD to designer Gaiane Avakian and Gulnara Karimov, a daughter of Uzbek President Islam Karimov. After this scandal, TeliaSonera President Lars Nyberg and financial director Per-Arne Blomquist lost their positions in the company.

“Doing business may be beneficial in Asia, but the situation with entering market should be improved”, TeliaSonera director general Johan Dennelind said.

Geocell has no information on the issue and abstained to make comments. As reported, TeliaSonera holds Geocell mobile communications operator in Georgia. We have contacted the company to receive information on availability of sales of the company. The company representatives noted they had no specific information and suggested us to apply to TeliaSonera with additional questions.

TeliaSonera has taken no real steps for withdrawing from the Georgian market. Only a statement was made on this decision. Only TeliaSonera representatives are able to provide specific answers to the future plans and the market withdrawal reasons, Geocell representatives noted.

Turkcell Plans

Meanwhile, Turkcell plans to negotiate a purchase of TeliaSonera’s assets in Azerbaijan, the Trend news agency reports referring to comments from Turkcell.

The negotiations will be supposedly held in Baku this week.

In this situation, the issue about who will purchase the Georgian asset of TeliaSonera becomes more relevant. The company representative says the company plans to sell its stake in Geocell, but cannot name a potential client. “The process will take certain time and we should not accelerate this process”, the letter reads.