Bargain sale goes on: BeST bought by Turks (updated)

Turkey's mobile phone company Turkcell signed an agreement to acquire a 80 per cent stake in Belarusian mobile operator BeST.

As an Interfax-Zapad correspondent reports, a Sale and Purchase Agreement was signed between the State Property Committee of Belarus as a seller and Telekomunikasyon Hizmetleri A.S. as a buyer and Turkcell Iletisim Hizmetleri A.S. as a guarantor.

As journalists learnt from Mikalai Azamatau, head of the State Committee of Military Industry (one of the founders of the Belarusian operator¬– Scientific Research Institute of Automation Equipment is a lower organisation of the State Committee of Military Industry -IF), “our state gets USD 600 for 80 per cent stake.” Moreover, Turkcell “will invest actively and aggressively USD 400 in our network.” “We think this deal is profitable both for Turkcell and Belarus,” M. Azamatau stressed.

Minister of Communication and Informatization of Belarus Mikalai Pantsyalei said this deal was a “very important event for the Belarusian market of telecommunication”. “I believe that aggravation of competition at market is for the good of the market and customers,” he noted. “Using Turkcell’s experience and investment resources, BeST will make more dynamic progress,” m. Pantsyalei added. He also emphasised that “the agreement was signed not because BeST has problems.”

The minister noted that “the market is already shared, but there is still a resource of 1 million subscribers”. M. Pantsyalei sees communication market growth prospects in introducing of third and then forth generation mobile technologies in Belarus. “In my view, future competition will be deal not with drawing over of customers, but with services buildup by using of new technologies and new services,” he noted.

Turkcell’s general director Süreyya Ciliv said in his turn that “we have come as good partners, we would like to cooperate to make BeST one of the best companies in the world.” “We think Belarus has rather high potential in economy and technology. We are happy to work with Belarus and think that the agreement signed today is a step forward to more fruitful cooperation between Belarus and Turkey,” he noted.

As Turkcell has informed, the stake will be purchased from State Property Committee of Belarus at USD 500 million. The payment is expected to be realized in 3 tranches of which USD 300 million is expected to be paid on the closing date, which is expected to be 30 days after the signature date and additional USD 100 million tranches are expected to be paid on December 31, 2009 and 2010 respectively. An additional payment of USD 100 million shall be made when BeST records a full-year positive net income for the first time.

GSM operator Belarusian Telecommunications Network (BeST) was registered on 5 November, 2004. Founders of the company were Scientific Research Institute of Automation Equipment and Beltelecom with stakes of 75 and 25 per cent respectively.

As for the beginning of July, the mobile operator has 186,700 subscribers. BeST is available at 26.3 per cent territory of the republic, or for 68.6 per cent of population, the communication is provided by 438 basic stations.

Local authorities had to turn off base stations due to late payment in the beginning of 2008. After debt repayment base stations turned on again. In 2007 BeSt fulfilled only 13 per cent of its year’s services plan that caused harsh criticism of the Ministry of Communication. The operator got China’s loan of USD 234 for infrastructure building in 2006. It is to be paid off in 2009–2014.

Turkcell is the leading GSM operator in Turkey with 35.1 million customers with a market share of approximately 57 per cent. Turkcell has interests in international GSM operations in Azerbaijan, Georgia, Kazakhstan, Moldova, Northern Cyprus and Ukraine.