Russian billionaire Mikhail Fridman, a co-owner of VimpelCom Ltd., is happy that Norway’s Telenor has begun selling its stake in the wireless carrier, because competition between the two companies in some markets created an “abnormal” situation on the board.
Telenor, which began selling its 33% stake of VimpelCom Ltd. earlier in September, is a direct competitor in Pakistan and Bangladesh, markets that have a combined population of about 380 million, Fridman said. VimpelCom Ltd., based in Amsterdam, operates in Russia and dozens of emerging markets, including those two.
At VimpelCom Ltd. board meetings, “half of the members would usually leave the room because they had a conflict of interest”, said Fridman, whose LetterOne Holdings is the largest owner in VimpelCom Ltd. “This is abnormal, it’s like PepsiCo managers would’ve been sitting on the Coca-Cola board”, the businessman said.
Telenor sold part of its VimpelCom Ltd. shares for $499 million earlier in September and issued bonds convertible into VimpelCom Ltd. shares to facilitate further disposals in the future. VimpelCom has declined 17% in September as Telenor’s partial sellout pressured the stock. The shares closed 0.8% down on September 23, at $3.54.
VimpelCom has more than 200 million users in 14 countries and is not currently interested in geographic expansion, according to Fridman, who is Russia’s fifth-richest man with a $12.9 billion fortune, according to the Bloomberg Billionaires Index.
The company’s priority is to change its business model from being a low-margin communications infrastructure to offering services via integration with content providers like Uber Technologies, he said. LetterOne invested $200 million in Uber earlier in 2016.
“We have an alliance with Uber regarding certain markets – such as Russia and Ukraine, where we have strong competitive position – while Uber doesn’t because they don’t know these markets”, Fridman said.
LetterOne is also preparing to solve a decade-long dispute in Turkey by year-end. It has offered to either sell its 13.2% stake in local carrier Turkcell Iletisim Hizmetleri, or buy another 13.8% from Turkish counterpart, Cukurova Holding.
“Both options work fine for us”, Fridman said. “As far as we understand, Cukurova and its shareholders are suspended from taking decisions there. Ultimately it’s up for the Turkish government what to do with Turkcell”.
As of last week, Telenor had about a 24% in VimpelCom Ltd., according to Bloomberg data. (Prime/Business World Magazine)