The key facts

  • Uzbekistan's Competition Committee approved VEON's purchase of the Perfectum operator subject to conditions preserving competition
  • The deal is worth about $207 million, including Perfectum's financial debt of about $93 million; completion is planned by the end of October
  • VEON will receive 115 MHz of spectrum in the 850 and 3800 MHz bands, increasing Beeline's frequency portfolio by roughly 50%

Approval of the deal with conditions

The Competition Committee for the Development of Competition and Protection of Consumer Rights of Uzbekistan has issued preliminary consent for the acquisition of 100% of shares in JSC Rubicon Wireless Communication, which provides mobile services under the Perfectum brand. The buyer is the UAE-registered company VEON UZB Holding Ltd, part of the international VEON group and holding 100% of shares in LLC Unitel, which operates under the Beeline brand. A special commission reviewed the deal for economic concentration and approved it with a number of mandatory conditions aimed at preserving competition in the telecom market.

Conditions for the new owner

According to the committee's decision, VEON must ensure Perfectum's independent operation for at least three years after the purchase and the expansion of the 5G Standalone network to other regions of Uzbekistan. Tariffs for 5G FWA services for existing subscribers must remain unchanged for 12 months, the average internet speed must not fall below 300 Mbit/s, and comfortable conditions must be created for new users. It is prohibited to impose on subscribers conditions unrelated to the subject of the contract, to restrict switching to other operators, to force the use of Beeline and VEON digital platforms, or to restrict access to competing services. Unjustified deterioration of service conditions is also prohibited. The company is obliged to protect subscribers' personal and commercial data, not use them to restrict competition, and not transfer them to foreign servers in violation of legislation. The parties to the deal must comply with the law 'On Competition' and ensure fair competition in the market.

Deal parameters

On October 19, the VEON group announced an agreement to acquire 100% of Rubicon Wireless shares. The total cost of the deal is about $207 million, including Perfectum's financial debt of about $93 million. According to Gazeta.uz, the acquisition is planned to be completed by the end of October. VEON noted that the purchase will strengthen Beeline Uzbekistan's position through the integration of frequency spectrum and infrastructure: Perfectum's assets include 115 MHz of spectrum in the 850 and 3800 MHz bands, which will increase Beeline's total frequency portfolio by approximately 50%, as well as network equipment, including a 5G Standalone network based on Nokia solutions. The company expects to meet growing demand for data transmission, accelerate 5G deployment and expand wireless broadband access across Uzbekistan.

Background

In mid-July, the committee reported approval of a deal to sell 50% of the Perfectum operator: the applicant was 'citizen F. Mamatjanov', who intended to acquire a 50% stake in Rubicon Wireless Communication. At the president's open dialogue with entrepreneurs in August, InfinBank's majority shareholder and founder of Uztex Group Farkhod Mamatjanov asked for assistance in promptly obtaining the committee's conclusion in order to attract $200 million in investments. The head of state took the matter under personal control, after which the antitrust authority, having studied the mobile services market, gave preliminary consent to the economic concentration, having established the absence of risks to the competitive environment.