Unfolding of the network of new Kazakhstan GSM operator MTS can slow down till the end of year 2007 because of needed big investments - expert

/INTERFAX-KAZAKHSTAN, Astana, December 5, 06/ - Forming of the full- value network of stations of the third in Kazakhstan operator of mobile connection of GSM standard - Mobile Telecom Service (MTS, is creating by Kazakhtelecom JSC) - can slow down till the end of year 2007, thinks the competent specialist in telecommunication branch of the republic. It is conditioned by the number of reasons, including the financial character, he had noted, wishing to stay unnamed, in the interview to the agency Interfax-Kazakhstan. "Despite that the exit of the third operator of mobile connection of GSM-900 standard is planned to the beginning of the next year, it won't be such easy as it may seem from the first sight. Company surely will meet the number of nuance as of financial character, as connected to competent struggle on the Kazakhstan market of telecommunications", - had noted the expert. First of all, he stressed, MTS "needs large amount of investments to the forming of its infrastructure, including base stations, and volume of these investments on the first stage is estimated as minimum at 150 m. US dollars". "Now it is examined the variant of attraction of the portfolio investor, which will provide the required investments, but will not at any aspect interfere to the operational activity of the company. That is speech per se is about that after Kazakhtelecom JSC will left 51%-ge stake in MTS, and the rest 49% will be transferred to this investor. As the result MTS will receive the so needed initial volume of investments without sufficient investments efforts of Kazakhtelecom JSC", - told the interlocutor. "If to consider the sum about 100 m. dollars, which it is needed to pay to the state for the third license GSM-900, - added the expert, - then the total volume of investments to MTS at the first stage is estimating at the level about 250 m. dollars". To the question, whether the sources from the future selling of 4.6% voting shares of Kazakhtelecom JSC can be used on development of MTS, the source had answered that the money gained from offering of these papers will be directed to the income of Kazakhstan holding of state assets management Samruk JSC, which manages 55.6% of common shares of Kazakhtelecom JSC. As it is known in accordance with the resolution of government dated October 17, 2006, it was accepted the decision to sell on the internal market of republic 4.6% of voting shares of Kazakhtelecom JSC - in total 497597 copies. This so called "public" offering will take place in December and is oriented on selling of shares to the population of the republic. "That is searching of investments to development of MTS is totally lay on Kazakhtelecom JSC, and of course some part of its profits will direct, except all others, on these objectives," - told the interlocutor. He also had paid attention to that MTS is expected by the "rough competition" from the side of operators of mobile connection, acting in republic. So, the expert of the agency had resumed, by his estimations the "unfolding of the network of stations of the new player on the market of mobile connection, enough for competition with the current, may last till the end of next year, if not later". Meanwhile in Samruk, as it was informed, are expecting that the third Kazakhstan operator of mobile connection of GSM standard till the end of the next year will manage to attract not less then 700 th. subscribers. MTS, as it is expected will provide the services under the trademark NeoTelecom. In Kazakhstan currently are acting two operators of mobile connection in the GSM standard: Kar-Tel with trade marks K-Mobile an Beeline; is controlled by Russian Vympelcom and GSM Kazakhstan (with trade marks K'Cell and Activ; shareholders are Finnish-Swedish-Turkish FinTur and Kazakhtelecom JSC). Along with it the company Altel (daughter of Kazakhtelecom, trade marks Dalacom and PAThWORD) provides the services of mobile connection in the CDMA standard. Population of Kazakhstan is exceeding 15.3 m. people; users of mobile connection are about 46% of the population. Kazakhtelecom JSC is the leading operator of connection in Kazakhstan, taking the dominating position on the native market of telecommunications. Shareholders with the stake of owing of the common shareholdings are Samruk (55.6%), BODAM B.V. (16.9%), The Bank of New York (10.2%), Сentral Аsian Industrial Holdings N.V. (9.6%). [2006-12-05]