TeliaSonera in new bid to end Turkcell dispute

Nordic telecom operator TeliaSonera and Russia’s Altimo have decided to combine their stakes in MegaFon and Turkcell in a new company to be listed on the New York Stock Exchange.

The deal signifies an attempt to end a long-running dispute between the two companies over the ownership of Turkcell.

The new company is to operate internationally with over 90 million subscribers in Russia, Turkey and other countries in the Caucasus region.

Plans call for further developing the operations at Turkcell and MegaFon as well as expanding into new emerging markets, according to a statement from TeliaSonera.

The new company will be the majority owner of both Turkcell and MegaFon, be based in a western country, and feature “well functioning corporate governance”, according to the statement.

TeliaSonera CEO Lars Nyberg hailed the deal as a an important step forward for both companies.

“I am very pleased that we have reached an agreement with Altimo to combine our efforts in resolving the legal disputes, which have been going on far too long,” he said in a statement.

“We have focused on creating a governance structure where all major parties will have good possibilities to influence, without single-handedly controlling, the management of the new telecommunications group. There is also very little risk of disruptive deadlock situations.”

At the heart of the dispute, which erupted in 2005, was a decision by Turkcell’s previous majority owner, Cukurova , to sell the same Turkcell ownership shares twice, first to TeliaSonera, and then to Altimo.

TeliaSonera and Altimo have now vowed to “collaborate and align their efforts” to solve their respective disputes with Cukurova in order to ensure the creation of the new company.

“Such collaboration is expected to result in a speedy resolution of the disputes,” according to TeliaSonera.

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‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.