Uzbek regulators have suspended the license of Russian owned MTS’s subsidiary, Uzdunrobita, for a further 90 days. This will undoubtedly increase the volume of customers who have left the network as there has not been service since the 17th of July. Both the regulator and MTS claim wrongdoing on the part of the other party.
The prior suspension for 10 business days was handed down on the 17th. MTS allege “an unwarranted attack on the business of a Russian investor.” In addition to the increased suspension, employees of Uzdunrobita have been subject to arrest.
Trouble in the relationship between Uzdunrobita and the government of Uzbekistan first emerged in relation to disputes over taxes which have led to entanglement with multiple government agencies. There are also allegations that the MTS subsidiary has used illegal equipment.
MTS is understood to have invested over US$1.1 billion in Uzbekistan, leaving it open to substantial losses if it can no longer operate in the territory.
MTS has recently resolved a dispute with the government of neighbouring Turkmenistan whereby they agree to pay a percentage of profits to the state-owned telecoms provider. Prior to the dispute in Uzbekistan, they served around 9.5 million customers—nearly a third of the population.
Observers allege systemic corruption in Uzbekistan and draw attention to the economic power held by the immediate circle of President, Islam Karimov.