Russian news
Russian news

07/03/2008

Telecoms to be included as a strategic sector
 

The government wants foreign investors to seek its permission for buying control of mobile and landline communications companies, a measure that could hamper growth in the booming sector, according to draft legislation made public Thursday.

The requirement is the latest addition to the bill seeking to regulate foreign investment in strategic industries that are crucial for national security.

Some of those additions, such as Internet providers, the print media and the fishing industry, have raised concerns that the definition of strategic is being stretched too far, however.

Buying control of a company that "dominates the communications services market" or "holds a significant position" in the landline communications network would become subject to government approval if the proposals became law.

The broad definition of applicable communications companies appears to encompass both landline and mobile operators. The phrase "significant position" is likely to leave room for interpretation by officials.

Strong opposition to the new requirement came from the IT and Communications Ministry at a meeting held Thursday by the State Duma's Construction and Land Policy Committee, which oversees the bill.  

If the bill takes effect it will "hamper investment on the communications market and will no doubt cause stagnation in the industry," Deputy IT and Communications Minister Alexander Maslov told the committee.

The country's telecoms market, both fixed-line and mobile, has presented attractive opportunities for foreign investors. Last month, VympelCom, the No. 2 mobile operator, paid $4.3 billion to acquire Golden Telecom, the country's largest independent fixed-line operator. The deal gave VympelCom more than 400,000 new broadband Internet customers and a strong foothold in fixed-line services.

Source : The Moscow Times

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