Rostelecom CEO Wants Mobile Deal With Tele2 Russia By Year-End

   By Olga Razumovskaya 

MOSCOW--Russian state-controlled telecommunications company Rostelecom (RTKM.RS) hopes to strike a deal to merge its mobile assets with that of Tele2 Russia soon, Rostelecom's chief executive, Sergei Kalugin, said Wednesday.

"Rostelecom has objective reasons to want to complete this deal [by year-end]," Mr. Kalugin said at a news conference.

The mobile virtual network operator deal will allow Rostelecom to boost its mobile segment, which currently brings 13% of the company's revenue and become a viable fourth mobile player in Russia.

Rostelecom will be able to use Tele2's vast network infrastructure to become the fourth largest player on the Russian mobile market, the company said.

Russia's second-largest lender VTB Bank (VTBR.RS) purchased the mobile operator in April from its Swedish parent, Tele2 AB (TELE2-B.SK) for $3.55 billion, and agreed to sell it in October to companies affiliated with private lender Bank Rossiya.

Mr. Kalugin was talking to reporters as the company reported a 12% rise in profit in the third quarter of 2013.

Following the long-awaited merger with telecoms company Svyazinvest which was completed in October, Rostelecom said the full-year 2013 revenue of the reorganized company will grow insignificantly and the revenue of Rostelecom alone for 2013 will stay flat on the year.

The company said it expects only marginal revenue growth in 2013.

Write to Olga Razumovskaya at [e-mail]

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