Crossroads Asia

Why is TeliaSonera Leaving the Eurasian Telecom Market?

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Crossroads Asia

Why is TeliaSonera Leaving the Eurasian Telecom Market?

Business in Eurasia proved to be neither easy nor clean.

Why is TeliaSonera Leaving the Eurasian Telecom Market?
Credit: Telecommunications mast TV antennas image via

TeliaSonera, the Swedish-Finnish telecom giant, announced last week that it plans to exit the Eurasian market. The company’s President and CEO Johan Dennelind said in a press release, “We realize that this will be a complex task that will take time. 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.”

The company will be divesting itself of operations in Nepal, Kazakhstan, Uzbekistan, Azerbaijan, Georgia, Moldova, and Tajikistan.

TeliaSonera last appeared in The Diplomat in reference to the wide-ranging and ongoing corruption scandal involving, in part, its entry into the Uzbek market, but the company has experienced other difficulties across its operations in Eurasia. That includes, as RFE/RL notes, “troubles repatriating cash, and difficulties identifying who, exactly, its local partners are.”

In a telephone news conference, which RFE/RL provides an account of, Dennelind said that the company has been unable to repatriate about $605 million from Uzbekistan and Nepal and that in Uzbekistan and Azerbaijan TeliaSonera doesn’t really know the identity of the “ultimate owners of its local partner companies.” The Wall Street Journal said the company declined to comment on the corruption allegations (which Eurasianet has a good rundown of), but TeliaSonera “has said an internal investigation had found the company had broken its own ethical rules but didn’t breach any laws.”

TeliaSonera has not been specifically charged in any of the probes in Sweden, the Netherlands, or the U.S. related to Uzbekistan, but its reputation has suffered under the weight of scandal.

It’s not surprising that TeliaSonera is pulling out of the Eurasian market and, in the company’s words, planning to “ increase focus on its Regions Europe and Sweden within the strategy of creating the new TeliaSonera.” Doing business in Eurasia is not easy, and presents ethical hazards. In 2013, the company introduced a “Policy on Freedom of Expression in Telecommunications” which directs the company to make “careful assessments of all major requests and demands that may impact the freedom of expression.”

For example, Tajikistan makes a few appearances in the company’s press releases tagged with “Freedom of Expression” — which report on, but per policy do not generally comment on, the company’s “efforts in relation to requests or demands with potentially serious impacts on freedom of expression in telecommunications.” An August 26 update reported that the Tajik government had requested that Tcell, the TeliaSonera brand servicing Tajikistan, block YouTube, Facebook , (a religious website belonging to Akbar Turajonzoda, incidentally a former IRPT member), and (an IRPT publication) for an unspecified period of time. On August 28 the Tajik government ordered the IRPT to close; after that order there were a pair of gun battles near the capital, which the government has pinned on the IRPT. A July release on blockages in Tajikistan said that at that time “a total number of 90 sites are blocked in Tajikistan.”

On September 23, Asia-Plus reported that YouTube, Facebook and Odnoklassniki (a Russian social networking site), had been unblocked.

TeliaSonera noted in the press release announcing its departure from Eurasia that “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 is not sure how long it will take to exit Central Asia, but that’s the plan.