| Deutsche Telekom says goodbye to MTS Germany's largest telecommunications concern, Deutsche Telekom, seems to intend to curtail its presence in the Russian communications market. In any case, this is exactly what the Handelsblatt newspaper, published in Düsseldorf, claims, one of the most authoritative publications in the business world of Europe. Citing “financial circles close to the concern,” the newspaper reported yesterday that Deutsche Telekom has instructed the investment bank UBS to sell its stake in the Russian cellular telephone provider Mobile Telesystems (MTS). We are talking about 25.1% of MTS shares owned by DeTeMobile, a subsidiary of Deutsche Telekom involved in the cellular business. It is noteworthy that the separation of this company from Russia occurs precisely at a time when representatives of the eastern direction of German business literally cannot praise enough the very favorable conditions created in our country for foreign investors.
Hans Ehnert, a representative of the Bonn headquarters of the telecommunications giant, did not openly announce his exit from a quite successful Russian enterprise in a conversation with a Vremya Novostei correspondent, saying that “Deutsche Telekom does not comment on this topic.” Nevertheless, the “newspaper speculation” fits well within the framework of the process that already began last year, when Deutsche Telekom sold off 14.9% of the shares of its 40% stake in MTS. Proceeds from the sale of shares, as management stated then, went to cover part of the concern's debts.
MTS also refuses to comment on the steps of the German shareholder, citing corporate ethics and lack of information. Vice President of MTS OJSC for Marketing Mikhail Susov yesterday told Vremya Novostey literally the following: “I can’t say anything. As soon as we have some more detailed information, then we will be able to talk about something.”
German analysts call the Russian enterprise “highly profitable.” At the end of 2003, MTS's gross income exceeded $2.5 billion, and its net profit exceeded $517 million. This year, according to forecasts, MTS's income will reach $3.22 billion.
MTS was created by the Moscow City Telephone Network (MGTS), Deutsche Telekom (represented by DeTeMobil), Siemens and several other shareholders as a closed joint-stock company in October 1993. Four Russian companies owned 53% of the shares, two German companies - 47%. At the end of 1996, AFK Sistema acquired the stake from Russian shareholders, and DeTeMobil bought the shares of Siemens. In 2000, MTS CJSC was transformed into an open joint-stock company, and in the same year its shares appeared on international financial markets. They are listed as American Depositary Receipts on the New York Stock Exchange.
German financial analysts explain the possible sale of MTS shares by the fact that Russia, due to its too significant need for capital, is simply too tough for Deutsche Telekom, and therefore the concern has lost interest in geshefts with MTS. Parting with the remaining capital in MTS means for the German concern a complete withdrawal from the Russian market. Experts clearly name North America and Europe as a new strategic focus for the concern.
By the way, it was precisely because of the lack of funds that Deutsche Telekom had to give up its strategic goal - the desire to acquire a majority stake in MTS in the foreseeable future. This step was postponed for the future due to, as Deutsche Telekom management diplomatically noted, “the situation among its own shareholders.” The 25.1% of MTS share capital that remained in his possession to date was retained in order to again try to acquire a controlling stake in MTS. But in its current form, this block of shares represents a purely financial investment, and this does not suit the management of the concern for the long term. Yuri Shpakov, Berlin, Denis UVAROV |
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