Russia MTS buys local network operator for $110 mln

MTS, Russia's largest mobile phone operator, has bought telecoms network operator Eurotel for $110 million, MTS said.

Russia MTS buys local network operator for $110 mln

MTS, Russia's largest mobile phone operator, has bought telecoms network operator Eurotel for $110 million, MTS said on Thursday.

MTS, which has 97 million subscribers, wants to speed up expansion of its Internet broadband business, which telecoms operators see as the main driver of their future revenue streams.

"This deal will make a platform for introduction of new innovative services in the future," the company's president Mikhail Shamolin said in a statement.

MTS also expects to reduce network leasing costs.

Privately owned Eurotel has a backbone network of large transmission lines carrying traffic from smaller cables, the key factor for expansion on the fast-growing broadband services market.

Shamolin earlier said the company would spend around $200 million to expand its main cable network over the next three years to 60,000-70,000 km.

The Eurotel acquisition would immediately add 19,500 km to MTS network and increase it to around 35,000 km, MTS said.

The move to buy Eurotel follows MTS's acquisition in October of 51 percent in fixed-line operator Comstar for 39.15 billion roubles ($1.30 billion) and a $4.3 billion Vimpelcom's merger with Golden Telecom in 2008.

In 2008, MTS, part of services conglomerate Sistema, spent $134 million on cable channel leasing. The figure includes $80 million spent in Russia alone, and in 2009 this cost will exceed $100 million.

Reuters
Last Mod: 24 Aralık 2009, 20:59
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