Telenor CEO Jon Fredrik Baksaas told a Russian economic forum in London that his company hoped to obtain approval from the Federal Antimonopoly Service to increase its stake, adding that Telenor was prepared to take control of the mobile operator and manage it efficiently. The move should be seen as long-term investment, he said.
VimpelCom, Russia's second largest mobile phone operator, is best known for the Beeline trademark in Russia and Kazakhstan, and also has newly acquired operations in Ukraine, Tajikistan and Uzbekistan.
The company is majority owned by Telenor and Altimo, the telecoms arm of financial giant Alfa Group. A conflict between Telenor and Alfa Group first erupted over VimpelCom's plans to enter the Ukrainian cell phone market.
Alfa Group supported a VimpelCom deal to acquire Ukrainian Radio Systems, a leading cell phone operator in Ukraine. However, Telenor was against the deal, saying it was overpriced.
The deal was struck in the fall of 2005, and in January 2006 Telenor filed three lawsuits with a Moscow arbitration court against VimpelCom to challenge the deal.
Earlier, Altimo asked the Federal Antimonopoly Service to allow it increase its stake in VimpelCom to 60% plus one voting share, and Telenor approached the service with a request to raise its ownership in the cell operator to 45%.
Telenor said that if Altimo's application were granted, the company would control 52% of the cell market in Russia, more than 54% in Moscow, and more than 59% in St. Petersburg, with similar effects to be felt in other Russian regions. Moreover, in addition to the controlling stake that Altimo aims to obtain in VimpelCom, the company currently holds a blocking share in MegaFon, Russia's third cell phone operator.
According to Telenor, this dominance on the market will restrict competition, push up prices, and bring down the quality of cell phone services.
