Thursday, July 26, 2012 -
Russian mobile services firm Mobile TeleSystems (MTS) returned to the Turkmen market on Thursday, months after the authoritarian Turkmen state unilaterally revoked its licensing contract.
MTS held 85 percent of the Turkmen mobile market, and Turkmen citizens were left scrambling by their eviction from the country. Turkmenistan’s state mobile firm, Altyn Asyr, proved incapable of absorbing the massive inflow of customers following the action.
MTS, in a statement published Thursday, said it has been awarded a contract for five years, with the possibility of being extended for another five years. The agreement was signed with Turkmen Telecoms, and MTS has agreed to pay the state agency 30 of the net profit generated in the country percent on a monthly basis.
ING analyst Tibor Bokor told the Reuters news agency that MTS should have no trouble getting back into business in Turkmenistan.
“MTS’s equipment in Turkmenistan is in surprisingly good shape and we expect it to launch commercially very quickly. With the absence of meaningful competition, MTS should get back most of its clients and Turkmenistan should boost consolidated revenues by 3 to 4 percent in 2013.”
The return to Turkmenistan occurred while the Russian firm is having problems with its subsidiary in Uzbekistan.
Earlier this month, Uzbekistan revoked the license of the firm’s subsidiary, and its acting head has been detained since mid-July. The Russian foreign ministry released a statement on Wednesday criticizing the action as harsh, and warned the Uzbek government that the incident would have negative consequences on bilateral investment.