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Rostelecom, Tele2 May Merge Russian Assets

Rostelecom is in talks with Tele2 about a possible merger of their Russian mobile businesses, Kommersant said Thursday.

The partnership could see predominantly fixed-line operator Rostelecom exchange its mobile operator Sky Link and a cash payment for a stake in Tele2's Russian unit, the business daily said, citing unspecified sources.

Another possibility being looked at is the creation of a new entity combining all the mobile assets of Rostelecom and Tele2 Russia, including fourth-generation licenses, in which each company would get a 50 percent stake, the paper said.

Konstantin Malofeyev, a minority shareholder of Rostelecom, may participate in the deal and transfer his 10 percent stake in the operator to the merged company. However, his shares have been frozen in a $230 million legal dispute with VTB Bank.

Spokesmen for Tele2 Russia and Rostelecom both declined to comment.

Tele2 is currently Russia's fourth-largest mobile operator with 21.6 million subscribers, while Rostelecom is the fifth-biggest with 12.9 million users, according to research group AC&M.

(Reuters, MT)

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