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Cable Technology Feature Article

July 16, 2010

MTS Acquires Multiregion

By Anil Sharma, TMCnet Contributor

Mobile TeleSystems OJSC (MTS (News - Alert)), a telecommunications provider in Russia and the CIS, has acquired a 100 percent stake in CJSC Multiregion (Multiregion), one of the leading groups of broadband and cable TV providers in the Russian regions, from Cavolo Trading Limited (Cyprus).

The purchase price amounts to $123.5 million.

Multiregion is a group of broadband and cable TV providers with presence in 37 cities of the Russian Federation.

The current network coverage of the company is around 1.8 million households, of which 1.3 million are FTTB-based. Multiregion has approximately 700,000 cable TV subscribers and 260,000 broadband subscribers.

"The acquisition will significantly enhance our position in the rapidly growing broadband and cable TV markets in the Russian regions. As the largest integrated telecommunications provider in Russia and the CIS, MTS will be able to provide its customers a broad, innovative and bundled offering of mobile and fixed line telephony, high-speed broadband internet access and television services in over 110 cities in Russia,” said Mikhail Shamolin, president and CEO of MTS, in a statement.

“It fits perfectly into our '3i' strategy, as it allows us to expand our integrated service portfolio and to differentiate our products from the competition," said Shamolin.

Recently Mobile TeleSystems OJSC announced that it has increased its direct ownership in TS-Retail OJSC (TS-Retail), a subsidiary of AFK Sistema (News - Alert), from 25 percent to 40 percent for a nominal sum. Effective control in the company increased to 55 percent through Comstar-UTS’ ownership in TS-Retail.

The transaction is aimed at optimizing the management structure of the company's retail business. TS-Retail had over 300 retail stores at the end of 2008. During 2009, MTS assumed operational control over the stores as part of its retail development strategy.

Back in June Mobile TeleSystems (News - Alert) OJSC had announced that it has increased its ownership in SWEET-COM LLC to 100 percent.

The remaining 25.1 percent stake was acquired for $8.5 million from private parties. The original 74.9 percent stake was acquired in February 2005. The company holds licenses for provision of telematic communications and data transmission services in the Moscow region and the Russian Federation including those based on the PmP (point-to-multipoint) technology.

Anil Sharma is a contributing editor for TMCnet. To read more of Anil’s articles, please visit his columnist page.

Edited by Erin Monda