MTS signals return to Turkmenistan

By bne IntelliNews May 3, 2012

Clare Nuttall in Almaty -

With relations between the two countries continuing to thaw, Russia's Mobile Tele Systems says it is planning to return to Turkmenistan close to 18 months after it's operations in the country were closed down by the authorities.

Majority shareholder Vladimir Evtushenkov announced the plan to return to the Central Asian country on Turkmen television on May 3 following a meeting with President Gurbanguly Berdymukhamedov in Ashgabat, RIA Novosti reports. The chairman of MTS parent Sistema said that the brand should relaunch operations within six months.

MTS officials are understood to have been in top-level talks with the Turkmen government over the resumption of its operations, which have been suspended since December 2010. Subsidiary Barash Communications Technologies, Inc.'s (BCTI) operations were effectively suspended by the Telecommunications Ministry on December 21, 2010 when it refused to extend the company's expired five-year license.

The ministry said the suspension would last just one month, but it has remained on hold for verging on 18 months now. State-owned Turkmentelecom also switched off all the communication channels leased by BCTI, setting up antagonistic talks.

Indeed, as recently as March 2012 it appeared that progress in negotiations to restart the operations had stalled. MTS official Oleg Raspopov told journalists that the company was unlikely to resume its business in Turkmenistan, despite the suspension having resulted in significant losses for the company.

Until the suspension, MTS had preformed well in Turkmenistan, seeing a rapid rise in subscriber numbers. As of 2008, it had an 85% share of the Turkmen mobile telecoms market. In just the first quarter of 2011, the suspension produced a $137.8m non-cash impairment loss for MTS, according to Prime-Tass.

MTS went on the war path, warning other potential investors of Turkmenistan's high risk in an open letter published just before the 2011 Turkmenistan Oil & Gas Road Show conference. The Russian company warned that the country's "unpredictability may lead to violations of international business practices, while socially conscious business is accompanied by significant risks."

Whilst there have been no hints from MTS or Turkmenistan as to the reasons behind the sudden agreement to relaunch the mobile brand in the country, it's likely no coincidence that it comes as relations between Russia and Turkmenistan are warming up after a particularly chilly spell during the worst of the crisis.

The suspension of MTS's licence came amidst tension sparked by Gazprom's decision to suspend gas imports from Turkmenistan in April 2009, which was followed by an explosion on Turkmenistan's main export pipeline. This dealt a severe blow to the Turkmen economy, and Ashgabat was swift to blame Russia.

However, relations have been gradually thawing in recent months. In October 2011, Russia said it would allow the transit of Turkmen gas to Ukraine, and Moscow has also given its backing to the planned Turkmenistan-Afghanistan-Pakistan-India gas pipeline.

Related Articles

Drum rolls in the great disappearing act of Russia's banks

Jason Corcoran in Moscow - Russian banks are disappearing at the fastest rate ever as the country's deepening recession makes it easier for the central bank to expose money laundering, dodgy lending ... more

Kremlin: No evidence in Olympic doping allegations against Russia

bne IntelliNews - The Kremlin supported by national sports authorities has brushed aside "groundless" allegations of a mass doping scam involving Russian athletes after the World Anti-Doping Agency ... more

PROFILE: Day of reckoning comes for eccentric owner of Russian bank Uralsib

Jason Corcoran in Moscow - Revelations and mysticism may have been the stock-in-trade of Nikolai Tsvetkov’s management style, but ultimately they didn’t help him to hold on to his ... more

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.