Kazakhtelecom bought Kcell
13 December 2018

Due to this, Kazakhtelecom has become the dominant operator in the cellular communications market in Kazakhstan.

in Astana, an agreement of Kazakhtelecom JSC with Telia Company and Fintur Holdings BV on the acquisition of 75% of the voting shares of Kcell JSC was signed. As part of the deal, Kazakhtelecom acquires a 24% stake in Kcell from Telia Company and a 51% stake in Fintur Holdings BV (a joint venture of telecommunications companies Telia Company (58.55%) and Turkcell (41.45%), respectively. Representatives of Telia Company reported that The agreed 75% share price is $ 446 million. The deal is another step for Telia to exit the Eurasian market. The company intends to focus on the Nordic and Baltic regions. This is the sixth deal in the region since 2015, when the decision was announced swedish telecommunications com AANII.


 

It is noted that in the process of preparing for the transaction, Kazakhtelecom conducted an in-depth investment analysis, evaluation and comprehensive verification of the results of Kcell's financial and economic activities in accordance with international standards for transactions of this kind. The decision to acquire 75% of Kcell shares was made by the Board of Directors of Kazakhtelecom JSC and the investment and strategic committee of Samruk-Kazyna JSC.

“For KCell and Activ subscribers, I want to say right away: there will be no increase in tariffs, a decline in the quality of communication (and it was precisely this that frightened social networks of opponents of this deal). Firstly, there are no prerequisites for this, all aspects of the transaction have been calculated by us, and secondly, on the eve of the IPO, Kazakhtelecom is not interested in such things, ”said Kuanyshbek Yessekeev.

Representatives of Kazakhtelecom are confident that the acquisition of a controlling stake in Kcell will positively affect the shareholder value of Kazakhtelecom, as well as serve to further develop the telecommunications industry in Kazakhstan as a whole, including by expanding the range and quality of modern telecommunications services offered to the population. The deal will allow Kazakhtelecom JSC to significantly expand its presence in the mobile communications market in accordance with the company's long-term development strategy.

Kazakhtelecom intends to build a high-tech integrated network in Kazakhstan that allows it to provide mobile and fixed-line services with high quality. This transaction is of strategic importance for us, allowing, among other things, to begin the implementation of a number of ambitious projects by optimizing and integrating networks. We intend to also contribute to the development of new services while maintaining the main activities of Kcell and provide high quality service for all customers, which will give additional impetus to the development of both Kazakhtelecom and Kcell. I would like to note that the antimonopoly authority established a number of requirements and conditions in the interests of consumers and the development of the industry as a whole, and we are certainly ready to comply with all the requirements of the regulator in accordance with the law, ”said the chairman of the board of Kazakhtelecom JSC, Kuanyshbek Yessekeyev.

Recall that in January of this year, the Committee on Regulation of Natural Monopolies, Protection of Competition and Consumer Rights of Kazakhstan accepted the application of Kazakhtelecom for the purchase of 75% of the shares of the telecommunications operator Kcell for consideration. After reviewing the application, the antimonopoly authority issued a decision regarding this transaction. At the same time, a number of requirements were established. In particular, the regulator envisages as conditions for a deal: the retention of existing tariff plans (packages) for three years after the completion of the transaction; the emergence of additional services for subscribers; expanding the coverage of the 4G network in rural areas (with a population of 4 thousand people and more) until 2021; introduction of 5G service standards no later than December 31, 2021. Along with this, the antimonopoly authority obliged Kazakhtelecom to preserve the Kcell and Activ brands. And in order to preserve the proper quality of services and cost, it is prescribed to preserve the existing agreements on the joint development of infrastructure with other participants of the cellular communications market.