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Russian LTE alliance dispute provider’s valuation

A new revelation has presented another setback to the group of Russian operators that have agreed to share LTE infrastructure. After reports last month which indicated that smaller players were being excluded from the consortium prompted an investigation from the country’s antitrust regulator, it has now emerged that the infrastructure provider Scartel has not set a standard price for the operators.

The LTE network has reportedly been valued by Scartel at US$1 billion, but this assessment has met with opposition from some of the four key consortium members. All of the members – operators VimpelCom, MegaFon and MTS, and broadband provider Rostelecom – are granted the opportunity to acquire a reported 20% stake in the network after 2014.

However, under Scartel’s current valuation, a 20% stake would cost US$200 million, and VimpelCom’s owner Alfa Group has reportedly expressed its displeasure at this price tag. This presents another obstacle for the coalition, on top of FAS’s (Federal Anti-Monopoly Service) investigation into claims that operators such as Smart, TTK and Tele2Russia have had their applications to the group ignored.

Scartel, which operates as Yota, switched allegiance from WiMAX to LTE in May 2010. The network –sharing initiative aims to eliminate the need for operators to deploy their own infrastructure. Yota plans on providing coverage to 180 Russian cities via the network by 2014.

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