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McClatchy-Tribune  08/01/2014 11:43 AM ET
Uzbekistan and MTS sign settlement agreement [Trend News Agency, Baku, Azerbaijan :: ]

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Aug. 01--"Mobile TeleSystems" (MTS) OJSC has signed a settlement agreement with Uzbekistan, in accordance with which the company plans to resume activity on the provision of mobile services throughout the country within a joint venture with the government's participation, according to the press service of the company.

The settlement agreement provides for the establishment of joint venture in which the operator will receive 50.01 percent, and the remaining 49.99 percent will belong to a state-owned unitary enterprise established and managed by the Uzbek State committee for communications, development of information systems and telecommunications technologies.

The joint venture will receive property, equipment and infrastructure, formerly owned by MTS's "daughter" -- "Uzdunrobite," the Russian company said.

The parties intend to complete all the procedures provided by the settlement agreement in the near future, and to launch cellular network into commercial operation by the end of 2014.

Uzbek authorities will provide the new operator with 2G/3G/LTE license, necessary frequency rate, provide rental of communication channels, will give all the permissions required to work in full capacity.

MTS and Uzbekistan will jointly submit an application for termination of the proceedings in the International Center for Settlement of Investment Disputes of the World Bank (ICSID).

The settlement agreement is governed by English law and provides for resolution of any disputes arising out of the settlement agreement in the International Court of Arbitration under International Chamber of Commerce in Paris (ICC).

As reported, on June 25 the Uzbek government made a positive decision on the resumption of MTS's activity in the country.

As reported earlier, in 2012, a subsidiary of MTS -- "Uzdunrobita" LLC, the leading operator in the Uzbek market with a customer base of more than nine million subscribers, has been deprived of licenses.

In January 2013, "Uzdunrobita" filed for bankruptcy amid widespread claims by the Uzbek authorities. The total amount of claims against the company by the General Prosecutor's Office, antitrust authorities, the Agency for Communication and Information and tax authorities was determined in the amount of $600 million.

Tashkent Economic Court declared the company bankrupt, by filing liquidation proceedings against it.

Two rounds of auctions were held on July, 2013 on the sale of both company's assets with starting price of $288 million, and property of 14 regional branches- total starting price of $ 224 million. All auctions were invalidated due to a lack of bids.

In late 2013 the property of "Uzdunrobita", including manufacturing equipment was transferred to the custody of JSC "Uzbektelecom" without the right of using.

Uzbekistan currently has four mobile operators- "Unitel" LLC (" daughter" of the Russian " VimpelCom " "Beeline" trademark), "Coscom" LLC( daughter of the Scandinavian "TeliaSonera", "Usell" trademark), working in standard GSM, and JV "Rubicon Wireless Communications" (RWC, "Perfectum Mobile" trademark) and "Uzbektelekom Mobile" (Uzmobile) -- branch of "Uzbektelecom " JSC working on CDMA standard. The number of mobile subscribers is about 25 million.

Edited by CN

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