TeliaSonera on Thursday announced that it is working on a plan to exit from its Eurasia operations, a part of the business that has weighed on results and dragged the telco into several corruption investigations.
The operator revealed that it plans to focus on its Swedish and European businesses, while reducing its presence in Eurasia with a view to leaving the region entirely in the fullness of time. The process has begun but it is not possible to estimate how long it will take, the telco said.
"We realise that this will be a complex task that will take time," said TeliaSonera CEO Johan Dennelind,
"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 entire region," he explained.
TeliaSonera’s Eurasia business includes operations in Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova and Tajikistan.
The operator insisted that it will continue to operate and develop its Eurasian businesses in "a sustainable and responsible way" while the exit process is ongoing.
"It is our belief that it is possible to do business in Eurasia which are both profitable and sustainable – but it is important to enter markets in a correct way," the company said.
That comment clearly refers to the operator’s recent difficulties in Uzbekistan.
The firm’s Ucell operation acquired its 3G licence in Uzbekistan in 2007 through Gibraltar-based Takilant, leading to allegations of bribery and corruption. Swedish law firm Mannheimer Swartling found no evidence o f corruption on the part of TeliaSonera, but sharply criticised the operator for neglecting to thoroughly investigate Takilant before doing business with it. The scandal cost a number of senior TeliaSonera executives and board members their jobs, including former CEO Lars Nyberg.
The telco has also had problems in Kazakhstan. This time last year its Kcell operation revealed that a number of contracts with external suppliers violated internal policies and procedures and commissioned an investigation.
Kazakhstan was one of the markets TeliaSonera highlighted as being particularly challenging in its second quarter results announcement in July. The telco warned that the difficult climate in the Eurasia region as a whole would continue to have an impact on its business in the second half of the year.
Eurasia generated revenues of 11.34 billion kronor (€1.2 billion) in the first half of this year, accounting for 21% of the group’s total. It also brought in 34% of EBITDA.
Exiting Eurasia will leave TeliaSonera free to concentrate on its European operations, although as yet it has not provided much information on what this will actually entail.
"Going forward TeliaSonera will focus on core areas such as connectivity and convergence – while supplementing with new initiatives in areas that complement, and strengthen, the core business in Regions Europe and Sweden," the operator said.
"The shaping of [the] new TeliaSonera is well under way," it said.
