Mobile telesystems (MTS) Relaunch in Turkmenistan

Russia’s Mobile TeleSystems (MTS) has revealed that it is resuming operations in Turkmenistan, after staying offline for almost year and a half. The company said that it has secured a five years settlement agreement and the dispute with the government is finally settled. The agreement can be extended for another five year term, subjected to the fulfillment of certain terms and conditions, while it has also been confirmed that MTS Turkmenistan will, on a monthly basis, pay Turkmentelecom 30% of its net profits. Further, MTS has also confirmed that it has been granted GSM and 3G licenses for a three-year term, while it also said it had signed ‘a number of interconnect and access to infrastructure agreements with Turkmenistan’s state-owned telecommunications providers’. The company’s infrastructure in Turkmenistan ‘remains fully in place’ and it is understood that MTS is currently working with vendors to restore the network’s capacity with a view to re-launching commercial services as soon as possible.

MTS’s license was suspended for one month is December 2010. Turkmen Ministry of Foreign Affairs publically stated that the opening agreement it signed with h MTS in 2005 was only valid for five years although cellco claimed that it concession was not due to expire until February 2012. The Ministry stated that the reason for its non-newel of MTS’s license among other s was the unreasonable high tariffs and its failure to reinvest sufficient level of its profits in its infrastructure.

MTS President and CEO Andrei Dubovskov while explaining about of the development stated: “We are pleased to announce the resumption of operations in Turkmenistan, a development of mutual benefit reached through a long negotiation process involving government of Turkmenistan and management of both MTS and Sistema JSFC, our majority shareholder. The agreements reached and enabled by the decree of the President of Turkmenistan serve the interests of MTS shareholders and further support the development of the economy of Turkmenistan. Despite our lengthy absence in Turkmenistan, we are confident that the quality of our network, the strength of our brand and deep understanding of the local market will allow us to establish a strong competitive position in this very attractive market.”