MTS, Vimpelcom on shortlist for Armentel

SKRIN Market & Corporate News
June 23, 2006 Friday 2:00 PM GMT

MTS, Vimpelcom and two foreign consortiums are on the shortlist in
the auction for a 90% stake in Armentel, Armenia’s fixed line monopoly
and a local GSM operator, Aton Capital said.

The former Soviet republic has a population of 3mn and cellular
penetration of around 21%. Armentel and K Telecom split the local
cellular market roughly 50/50 and the former reported 2005 revenue
of $145nm.

The acquisition of Armentel would add 3.6% to MTS’ top line or 2.6%
to Vimpelcom’s.

Aton estimates that Armentel’s cellular business accounts for 30% of
revenue, while the final buyer may opt to dispose of the fixed-line
segment. Aton would view a price of up to $350mn for the stake as
reasonable.