TeliaSonera said it is in the process of reducing its presence from seven markets in Eurasia, as it looks to make a complete exit from the region.
Referring to Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan, the company said the move was intended to increase focus on its European and Sweden regions, as part of a “strategy of creating the new TeliaSonera”.
While the exit is being positioned as a change in strategy, it is hard to ignore the controversy it has faced in parts of the region.
Uzbekistan in particular has been a sticking point, and in 2013 TeliaSonera’s CFO and other senior employees left the company following a spat over telecoms licences in the country.
It was also subject to a US investigation, along with Russia’s Vimpelcom and MTS, over corruption claims suggesting the companies funneled hundreds of millions of dollars to secure wireless frequencies in Uzbekistan, which also led to the departure of former CEO Lars Nyberg.
This was followed by allegations in May this year that TeliaSonera financed and aided a deal to allow Azerbaijan’s president to take over the state’s stake in the country’s largest telecoms company.
In a statement, TeliaSonera said it had worked since 2013 “on taking Eurasia to the next level”, adding that it still believed it was “possible to do business in Eurasia which are both profitable and sustainable – but it is important to enter markets in a correct way”.
Johan Dennelind, president and CEO, said TeliaSonera had established “better managed companies which we believe others can successfully develop further”.
“We realise that this will be a complex task that will take time,” Dennelind added. “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.”
In its most recent Q2 earnings results, the company said the quarter in Eurasia “was challenging in several aspects”, citing Nepal’s earthquake, and increasing price competition in Kazakhstan.
Following the announcement, Turkcell, a major partner for the company in the Eurasia region, issued a statement announcing it had appointed a strategic and financial advisor to explore its strategic options.
TeliaSonera and Turkcell, with a 58.55 per cent and 41.45 per cent stake respectively, partner up in Kazakhstan, Azerbajan, Georgia and Moldova through Fintur Holdings, an entity that addresses connectivity in the countries.
Speaking of the company’s new strategy, Dennelind said TeliaSonera “will focus on core areas such as connectivity and convergence”, and focus “more time and resourced on developing the operations in Europe and Sweden, in line with strategy”.
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