Rostelecom agrees conditions for Tele2 buyout

News

Rostelecom, Russia's national fixed-line operator, has a 45% stake in Tele2Russia and the companies are now discussing technical issues of the buy-out.

Rostelecom’s CEO, Mikhail Oseevskiy said the instructions needed to prepare the transaction have been sent to the relevant state ministries and government departments.

Reuters reports that state-controlled Rostelecom could partially pay for the remaining 55% stake in Tele2 Russia with its shares, citing the Russian deputy prime minister, Maxim Akimov. Akimov added that owners of Tele2 Russia will get shares in Rostelecom, but the government will keep control.

Profits and subscribers up at Rostelecom

As the agreement was announced, Rostelecom reported its full-year 2018 financial results, with revenue increasing by 5% to ₽320.2 billion (Russian Rubles/€374.9 billion) and operating income before depreciation and amortisation (OIBDA) rising by 4% to ₽100.9 billion (€118.16 billion).

The telco’s net profit increased by 7% to ₽15 billion (€17.5 billion) and annual CAPEX grew 20% to ₽73.2 billion (€85.7 billion).

Total fixed broadband customers reached 12.76 million (including 12 million consumer and 755,000 B2B subscribers) in 2018, up from 12.729 million at the end of 2017. Rostelecom’s MVNO-based mobile users grew to 1.188 million from 828,000, while IPTV subscribers climbed from 4.849 million in the previous year. to 5.285 million.

Russia is ninth for full-fibre penetration rates in Europe in the new rankings released by the FTTH Council this week.

Tele2 Russia posted 16% annual revenue growth to ₽143 billion in 2018, with EBITDA jumping 43% to ₽43.7 billion (€51.2 billion).