Yota is building out its LTE network in 180 cities within the next three years. It expects to cover 70 million people, around half the country’s population. Russia’s leading GSM mobile carriers — Mobile TeleSystems (the largest mobile operator in Russia and CIS with over 102,4 million subscribers), MegaFon (Russia’s 2nd largest mobile operator with over 30 million subscribers), Beeline (25 million subscribers in 74 of the 89 Russian regions), as well as state-owned fixed line operator Rostelecom.
Under the terms of the deal, which was signed in the presence of Prime Minister Vladimir Putin and Minister of Telecoms and Mass Communications, Igor Shchyogolev, the firms will buy traffic from Yota and lease its LTE facilities. The buildout will be financed by Russian banks and has the approval of the Russian government and Yota’s investors, state-owned Russian Technologies (25 percent stake) and private equity firm Telconet Capital
The four Russian telecoms operators will each be given an option to take a 20% stake in Yota in 2014, at market prices. Telconet Capital Fund currently owns 74.9% of Scartel (Yota’s previous incarnation) and will be required to sell all of its shares, whilst co-owner Russian Technologies will reduce its 25.1% stake to 20%.
In November 2010 Yota indicated that as soon as it started selling its LTE service, it would stop offering WiMAX, migrating all of its existing WiMAX customers to LTE within three years.
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