MTS to create a cellular 'daughter' with Uzbek partnership: source

By Aynur Jafarova

Uzbekistan has decided to resume the business activity of the Russian Mobile TeleSystems (MTS) Open Joint Stock Company in the cellular market of the country.

The news was announced by a source in government circles that talked to Trend Agency.

"Under the decision of the Uzbek government adopted at a cabinet meeting on June 25, MTS will create a cellular 'daughter' with Uzbek partnership which will operate under the MTS brand," the source said.

However, the source did not mention the conditions under which MTS will resume work in Uzbekistan.

"The constituent documents on the establishment of the joint venture are expected to be signed soon," the source noted.

MTS ceased operations in Uzbekistan in 2012 after the local authorities raised multiple claims against the company, and Uzdunrobita, a subsidiary of MTS in Uzbekistan, declared bankruptcy.

Thus, the Tashkent city court on criminal cases delivered its verdict against four managers of Uzdunrobita in September 2012, sentencing them to penalties and various terms of correctional labor.

The court also made a decision on transferring the entire property of Uzdunrobita to government revenues, Tashgorsud Board of Appeals on criminal cases reversed this decision in early November 2012 and cancelled the arrest of its property.

The Board determined the amount of financial claims against the company at $600 million, with the possibility of payment in installments over a period of eight months.

The total amount of claims against the company by the Prosecutor General's Office, regulatory authorities, the Agency for Communication and Information, and tax authorities amounted to over $1 billion, which is the amount of investment made by MTS in developing business in Uzbekistan.

Before leaving the Uzbek market, Uzdunrobita was the leading mobile operator in the country with a customer base of more than nine million subscribers.

The number of mobile service users in Uzbekistan in early 2014 amounted to 19.6 million out of the 30.5 million population of Uzbekistan.

Cellular services in Uzbekistan are rendered by four operators: Beeline (Unitel LLC) - GSM standard, Ucell (FE COSCOM LLC) - GSM standard, Perfectum Mobile (Rubicon Wireless Communication) - CDMA standard, and Uzmobile (branch of JSC Uzbektelecom) - CDMA-450 standard.