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TeliaSonera pulling out of Central Asia and Eastern Europe

Swedish operator group TeliaSonera is reducing its presence in seven markets across Central Asia and Eastern Europe.

The move is the first step of a planned exit from the region as TeliaSonera looks to strengthen its focus on Europe and Scandinavia. The group will pull out of Azerbaijan, Georgia, Kazakhstan, Moldova, Nepal, Tajikistan and Uzbekistan.

Although TeliaSonera is painting the exit as part of an overarching strategy, the group has been dogged by controversy in the region – particularly in Uzbekistan. Back in 2013, the operator lost a number of senior employees including its CFO following a dispute over telecom licences in the market.

TeliaSonera was also one of the operators – along with Russian firms VimpelCom and MTS – that formed the focus of a US investigation into accusations of corruption in Uzbekistan. The allegations that the three operators spent hundreds of millions of dollars to obtain wireless frequencies illicitly ultimately resulted in former CEO Lars Nyberg leaving TeliaSonera.

In May this year, further allegations against TelianSonera surfaced claiming that the operator had both financed and facilitated a deal that enabled Azerbaijan’s president to assume control over the state’s holding in the country’s biggest telecoms firm.

TeliaSonera released a statement saying that it considered the region to be “profitable and sustainable”, but adding that it was “important to enter markets in a correct way”. CEO Johan Dennelid commented: “We realise that this will be a complex task that will take time. We are conducting this process market by market as each country and operation has its unique situation, but the ambition is to eventually leave the region.”

The operator’s latest earnings report deemed the region to be “challenging in several aspects”, giving the examples of fierce pricing competition in Kazakhstan as well as the recent earthquake in Nepal. 

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