Russian Operators Considering Purchase of Armenian GNC-Alfa

YEREVAN, May 23. / ARKA /. Russian telecommunications operators MTS, Rostelecom and Transtelecom are considering the acquisition of Armenia’s major operator GNC-Alfa, which says it controls 80% of the market, a Russian daily Kommersant reported, quoting a source close to the Armenian company.

GNC-Alfa chief executive Hayk Faramazian confirmed that the company’s shareholders were considering selling the business in whole or in part. The company is valued at $ 50-60 million. France Telecom is a likely competitor of Russian companies.

"We have hired consultants, who will handle the potential deal. As far as I know, they have already sent proposals to some Russian and European companies to buy the company," he said.

A source in the Kommersant said the shareholders want to get $50-60 million for the company and offers to purchase it were sent to MTS, Rostelecom, TransTeleCom and France Telecom.

A spokesman for Rostelecom, Oleg Rumyantsev, confirmed that the company received an offer to buy GNC-Alfa and was considering it. A press secretary for MTS Valeria Kuzmenko refused to comment but a source in the MTS said the operator is also exploring this possibility. A spokeswoman for Transtelecom, Tatiana Semenova, said the company is familiar with the proposal, but said it was not negotiating its purchase.

According to the source, France Telecom (trading as Orange) is also interested in the Armenian company. GNC-Alfa would enhance its position in the Armenian market and in the market of traffic transit c from Europe to Asia through Georgia and Armenia.

GNC-Alfa’s fiber-optic network covers about 70% of the country. The length is 1.5 thousand km. It provides wholesale Internet traffic and data services to all mobile operators of the republic and corporate clients.

According to Faramazian, the company controls more than 80% of the market. This year GNC-Alfa began offering broadband Internet services in Yerevan (under Ucom brand) for individuals. It has a license for WiMax in the range of 3.5 GHz. The expected revenue in 2011 is $20 million. EBITDA is $8-9 million.

According to a report on Internet in Armenia, published on circle.am, in February Ucom held 6.31% of the market of broadband access, Beeline – 44.14%, Orange – 18.58%, and Vivacell-MTS – 9.10%.—0—

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03:14 05/24/2011