The Amsterdam-based telecommunications company VEON which owns one of Armenia’s three mobile phone networks has asked authorities in Yerevan for permission to sell it to a rival Armenian firm, it emerged on Monday.
The Ucom operator confirmed its desire to buy VEON’s Armenian subsidiary which comprises not only the wireless operator but also the country’s main fixed-line phone network.
“If I’m not mistaken, VEON Armenia has been looking for a buyer for a long time,” said a Ucom spokesman, Ashot Barseghian. “Based on our business interest, we intend to acquire it.”
Ucom has already asked the State Commission for the Protection of Economic Competition to give the green light to the deal. The commission chairman, Gegham Gevorgian, said the Yerevan-based company would merge VEON’s Beeline mobile network with its own wireless division.
For its part, VEON Armenia has applied to another regulatory body, the Public Services Regulatory Commission (PRSC). Its chairman, Garegin Baghramian, told RFE/RL’s Armenian service that the company also needs clearance from the Armenian government and the National Security Service.
VEON and Ucom appear to have already agreed the basic terms of the deal. But they have declined to publicize the cost of the takeover.
VEON, which was formerly headquartered in Moscow and known as VimpelCom, had paid $376 million to buy its Armenian networks from a Greek company in 2006.Its office in Yerevan refused to comment on the reasons for VEON’s desire to sell them.
VEON struggled with more than 10 billion euros ($11 billion) of long-term debt when it sold an Italian mobile phone network, its last major asset in Western Europe, in 2018. The company’s largest shareholder is Russian tycoon Mikhail Fridman’s LetterOne fund.
VEON’s Beeline has the second largest number of mobile phone subscribers in Armenia after the VivaCell network owned by Russia’s MTS operator.
The third Armenian network was launched by the French telecoms giant Orange in 2009. Ucom bought it from Orange for an undisclosed amount in 2015 after growing rapidly and becoming the country’s leading Internet and cable TV service provider.
Ucom is believed to be controlled by the extended family of Gagik Khachatrian, a former Armenian finance ministry who was arrested in August on charges of abuse of power and misuse of public funds. Khachatrian denies the accusations.