Investments of Russian telecoms in CIS countries – current state and prospects for the future

Russian telecommunication operators have been expanding aggressively in the CIS since the early 2000s, but no major deals were recorded in 2008 or 2009. The move on the part of Russian operators toward business diversification into adjacent areas, uncertainty over the fate of Svyazinvest, the national state-run fixed-line holding, the high cost of telecommunication assets, and, of course, the more restrictive investment opportunities amid the financial crunch, have all contributed to the break which Russian operators took during the process of intensifying their expansion into the CIS markets. Nevertheless, investment activity is likely to resume in the near future, and a number of deals can be expected in 2010-2011.
Among the telecommunications companies, the major Russian mobile operators – MTS, VimpelCom, and MegaFon – have been the most prolific investors in the CIS. Although MegaFon’s exposure is, at present, limited to Tajikistan and two breakaway Georgian republics, the two other operators can each boast operations in almost half of the CIS countries. MTS has operations in Ukraine, Uzbekistan, Turkmenistan, Armenia and Belarus; and VimpelCom is active in Ukraine, Kazakhstan, Tajikistan, Uzbekistan, Armenia and Georgia.

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