Authorities increase pressure on MTS

10 Aug 2012

The attack on Russian-backed cellco MTS Uzbekistan by Uzbek authorities has escalated with sector regulator Uzbek Agency for Communication and Information (UzACI) applying to the Tashkent Economic Court to cancel all of the cellco’s operating licences. UzACI suspended the operator’s concessions last month, amidst accusations that it had committed a number of infractions and had been involved in laundering money, though the allegations are widely understood to be part of a government shakedown. Making matters worse for the Russian provider, UzACI has demanded around USD210 million in unpaid licence duties, adding to the USD80 million fine levelled at the company yesterday by the State Committee of Uzbekistan on Demonopolization, Support of Competition and Entrepreneurship for violating antimonopoly, consumer protection and advertising laws. Uzbek authorities have carried out similar raids on foreign-owned entities in the past, forcing them to hand over their assets to members of President Karimov’s inner circle. Running the risk of provoking Moscow further – Russia’s foreign ministry expressed its concern over the arrest of MTS managers including one Russian citizen – the Uzbek accounts of MTS have been frozen by the Prosecutor General’s Office until it completes its ‘investigation’.

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