TeliaSonera to exit Eurasia after scandals

By bne IntelliNews September 18, 2015

bne IntelliNews -

 

Scandinavian telecommunications group TeliaSonera has announced plans  “to reduce the presence in region Eurasia and over time fully leave”, the group said in a statement on September 17.

The company’s decision follows a scandal over its business dealings in Uzbekistan, where the company is being scrutinised by US and European authorities for allegedly bribing its way into the Uzbek market. The company allegedly transferred dubious payments to bank accounts linked to Gulnara Karimova, the eldest daughter of long-serving President Islam Karimov, to secure the right to operate in the country’s lucrative mobile market. Subsequent investigations raised additional doubts over the company's practices in Azerbaijan.

“TeliaSonera will increase focus on its regions Europe and Sweden within the strategy of creating the new TeliaSonera,” the statement reads. Teliasonera is jointly controlled by the Swedish and Finnish states.

“We realise that this will be a complex task that will take time. We are conducting this process market by market as each country and operation has its unique situation, but the ambition is to eventually leave the entire region,” CEO Johan Dennelind said in the statement.

Teliasonera owns local mobile operators in seven countries across the region (Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan), and has over 40mn local subscribers, according to company figures.

The region generated revenues worth SEK11.336bn (€1.2bn) in the first half of the year, up by 17.3% from a year earlier, company figures show. The region’s operating income increased by 16.9% y/y to SEK3.899bn in the period.

Last year, Moody’s Investors Service noted that Eurasia stands as “a relatively small contributor to the group's cash flows because of the high capex requirements in the region and the difficulties in accessing cash flows in some of these markets, such as Uzbekistan and Nepal”.

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