MTS Uzbekistan

Cancelled

Uzdunrobita, the first cellular network operator in Uzbekistan, began mobile phone service in NMT standard in August 1992. The company introduced its AMPS/DAMPS network in the spring of 1994 and in 1997 introduced the third generation DAMPS IS-136 digital network. In late August 2002, the company began testing a GSM 900/1800 network under a project with Sweden's Ericsson. The first phase of the new network was to cover Tashkent, where it was to operate in GSM 1800. The company was created as a joint venture between the US International Communications Group (45%) and Uzbekistan Ministry of Communications (55%). The initial investment for the NMT network was US$2.5 million, which was raised through the sales of half of ICG's shares to a Pakistani firm. By 2003, the Uzbek Ministry of Communications held 49% and U.S. corporation International Communication Group (ICG) held 51% of the company. The company obtained a US$10 million loan to expand the network to 8 more cities through a contract granted to Northern Telecom in March 1996. In addition, the company expanded its network by signing a US$8.4 million contract with Nortel in May 1997. The company served Tashkent, Bukhara, Karshi, Samarkand, Urgench, and Ferghana Valley by 1997. By 2002, the company had invested more than US$87 million in the Uzbek economy since it was founded. In August 2004 Russian MTS bought 74% of Uzdunrobita for $121 million. As announced at the time of the acquisition, MTS also signed a three-year put and call agreement with the remaining shareholder of Uzdunrobita – thought to be Gulnara Karimova-Maqsudi, the daughter of Uzbek President Islam Kaimov – to purchase the outstanding 26% stake. An amendment to the original option agreement, announced in August 2006, extended the exercise period of the put option to 14 July 2008.The price per customer was five times higher than that of similar acquisitions in Russia at the time. MTS believed the high price would be offset by the huge growth potential of the Uzbekh market, where mobile penetration was only some 2%, while fixed line penetration was a mere 6.8% in a population of 26.2%. MTS had an option to purchase the remaining 26% in Uzdunrobita at any time before 2007. In June 2006, Uzdunrobita changed its name to MTS Uzbekistan. Uzdunrobita had the largest number of subscribers in the Uzbekistan mobile phone industry by mid 2003. The first mobile operator in Uzbekistan had 98,504 users as of 1 August, of which 61,472 were in Tashkent city and region. The company provided service in 12 regions and Karakalpakstan, which was the broadest area of operation in Uzbekistan. At the end of 2005 Uzdunrobita had some 580,000 subscribers. As of end of 2006, the company reported that its customer base more than doubled in 2006, rising from 600,000 to 1.5 million. In June 2006, MTS Uzbekistan shut down its legacy AMPS/D-AMPS network, with the last remaining customers being transferred to its GSM network free of charge. In 2007, MTS Uzbekistan received Uzbekistan 3G licence. The company paid US $ 250 million for the license which is valid until June 2016. In June 2007, MTS purchased the outstanding 26% stake in Uzdunrobita, the largest mobile operator by subscribers in Uzbekistan, from a private investor for USD250 million in cash. Previously MTS owned 74% of the cellco; as a result of the transaction MTS’ ownership has increased to 100%. In 2Q of 2012, the business has closed due to bankrupcy. In June 2006, MTS Uzbekistan (formerly known as Uzdunrobita) announced plans to invest USD35 million in the development of its GSM network in 2006/07. Chinese equipment vendor Huawei had been contracted to install equipment to increase capacity by 630,000 lines.