Top mobile operator and retailer set to unite

Russia’s largest mobile operator MTS could be about to buy the country’s leading mobile phone retailer, Euroset. That’s according to the business daily Vedomosti.

The newspaper says the two companies have been in talks for weeks.

MTS is Russia’s leading mobile telecommunications company with 87.78 million subscribers.

Euroset has nearly 5,000 retail outlets in CIS countries and the Baltic region. The private company is co-owned by Evgeny Chichvarkin and Timur Artemyev.

According to Vedomosti, MTS, with its unnamed financial partners, are to create a company in order to take over Euroset. It’s reported they plan to buy Artemyev’s entire holding and part of Chichvarkin’s.

Both men deny they are about to sell out to MTS.

However, Euroset had announced earlier it was looking for a strategic investor.

Analysts report that Euroset’s growth rate is just a third of what it was in 2006.

The company’s debt in April this year stood at more than $US 800 million.

Vedomosti has quoted MTS as saying that in three years it plans to sell no less than 40 per cent of its contracts through a retail chain.

Officials at the remaining two of Russia’s “big three” mobile operators – Vimpelcom and Megafon – have said that if the deal goes through they will think about walking out on their existing contracts with the retailer.

Yet the CEO of Vimpelcom, Aleksandr Izosimov, has said that in case MTS buys Euroset, they are unlikely to break their contracts with the retailer at once.