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Megafon buys long-distance operator for $745m

03 June 2010 10:53 (UTC +04:00)

Baku â€“ APA-Economics. Russia’s third-largest mobile operator OAO Megafon Wednesday said it has closed the $745 million acquisition of long-distance operator ZAO Synterra, Total Telecom reported.

Megafon’s acquisition comes as competition intensifies between Russia’s long-distance operators, which make a large chunk of their revenue by selling capacity wholesale to mobile operators and regional fixed-line firms.

Privately held Megafon, which has 53 million subscribers across Russia, has been negotiating with Synterra’s owner PromSvyazCapital for several months, but recent press reports said OAO Rostelecom also considered making an offer.

Rostelecom provides the same service as Synterra--handling more than half of the long-distance call traffic in Russia and selling capacity to Megafon as well as the country’s largest mobile operator OAO Mobile TeleSystems.

VimpelCom Ltd., which also has mobile subscribers across Russia, owns cables running across Russia which it uses to route long-distance calls, and MTS is expanding its long-distance network.

Nordic operator TeliaSonera SA has a 43.8% stake in Megafon.