Kazakhtelecom values Tele2 at $1 billion
Kazakhtelecom has valued its wholly-owned subsidiary Mobile Telecom Service (which operates the Tele2 and Altel brands) at $1.1 billion of assets, according to the national operator’s statement for the first six months of 2024, posted on the Kazakhstan Stock Exchange (KASE) website. The buyer is Qatar-based Power International Holding (PIH).
The notes to the interim consolidated statement mention the reclassification of Mobile Telecom Service’s assets and liabilities. These are now considered as assets held for sale, along with related liabilities. As of the end of June, the assets were valued at $1.1 billion, while the liabilities totaled $367 million. The total transaction amount, including debt, for PIH is $1.4 billion.
Most of Mobile Telecom Service’s assets are fixed assets, valued at $412.5 million. Intangible assets account for $319.4 million, while goodwill (calculated as the difference between the company’s purchase price and the value of its assets) is at $199.4 million and right-of-use assets add up to $100 million.
The largest portion of the liabilities consists of long-term leases, totaling $93.5 million. Additionally, there are $49.3 million in long-term loans, $49 million in trade payables and $37.5 million in short-term loans.
In June, Zhaslan Madiyev, minister of digital development, stated that PIH would purchase Mobile Telecom Service for approximately $1 billion. He also mentioned that the Qatari holding would assume the obligation to build 5G base stations, as Mobile Telecom Service won the frequencies in the 2022 auction.
«I can tell you that the Qatari investor will contribute to the 5G infrastructure, not only through this mobile operator but also through others. Overall, at least $1 billion will be invested in the sector over the next five years,» Madiyev noted.
The upcoming sale of Mobile Telecom Service was first announced in February. A month earlier, the company had been included in the privatization plan by 2025. An agreement with PIH was signed during President Kassym-Jomart Tokayev’s visit to Doha in February. Subsequently, the deal was approved by Kazakhtelecom’s board of directors.
Discussions about the privatization of Tele2 and Altel surfaced last year. The Agency for Protection and Development of Competition (APDC) has been a strong advocate for selling one of the two Kazakhstani mobile operators to a private owner, emphasizing that Kazakhtelecom holds a monopoly in both the landline and mobile communication markets, where it controls over 80% and 60% of the market share, respectively. A background note on the privatization of Mobile Telecom Service indicated that the decision was driven by the need to stimulate economic growth and attract additional resources for expanding and upgrading production.
Currently, Kazakhtelecom is the sole stakeholder in Mobile Telecom Service. The state holding also owns 51% of Kcell shares. Additionally, Galimzhan Yessenov, owner of Jusan Bank, holds 14.87%, Jusan Bank itself owns 9.08% and the Unified Accumulative Pension Fund (UAPF) holds 7.06%.
