Buztel (merged with Vimpelcom Uzbekistan #1400)

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In 1996 the government of Uzbekistan, through its Minister of Post and Telecommunications, awarded Uzbektelecom International (Buztel) licenses to provide mobile telephone services based on the GSM 900/1800 standard for local, and long-distance calls. The license restricted the maximum number of subscribers to 115,000. Buztel intended to operate both fixed and mobile networks. Buztel was 99% owned by Indonesian Bakrie Group and 1% by Makhalliy Telecom (former state-owned Uzbek Telecom). The company awarded a US$60 million contract to Alcatel to develop the first phase of its GSM network in 1997. The network began operations in the second quarter of 1997. Bakrie Communications initially promised an investment of US$2.2 billion in Buztel. However, the Asian financial crisis (1997-1998) meant that the Bakrie Group was unable to implement a full roll-out of its mobile business plan in Uzbekistan, and licenses to operate in the long-distance and national markets were later revoked by the government for failure to deliver service. As a result, after 2002 Buztel only held a license to operate in the Tashkent region. The Tashkent GSM license was renewed in 2002 for a five year period. In December 2004, Russian Alfa Group purchased 100% of Buztel. The group intended to operate Buztel through Vimpelcom (project 3250), one of the top three Russian mobile telecom companies. In 2004 Alpha Group was the largest shareholder in Vimpelcom with 33.9%. Alpha Group, through Vimpelcom, finally acquired 100% of Buztel in January 2006 for $60 million plus about $2.4 million in debt. In July 2006, Vimpelcom merged Unitel and Buztel to one company called Beeline. At the end of 2004 Buztel was the smallest of seven mobile carriers in the Uzbek market, with an estimated 5,000 customers in Tashkent. In 2006 Buztel was expected to be merged with Unitel (project 1400), also controlled by Russian Vimpelcom.