Crossroads Asia

TeliaSonera Makes Progress Toward Leaving Eurasia

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Crossroads Asia

TeliaSonera Makes Progress Toward Leaving Eurasia

Having secured an exit from Nepal, Tajikistan reminds the company why Central Asia is such a tricky market.

TeliaSonera Makes Progress Toward Leaving Eurasia
Credit: Telecommunications mast TV antennas/ via

TeliaSonera, the Nordic telecom giant, announced earlier this year that it would be divesting itself of operations across Eurasia. That process has begun with the company announcing the sale of its Nepalese interests. Furthermore, recent notices from the company illuminate why the Eurasian market has been so difficult–with Tajikistan requesting tools for surveillance from TeliaSonera’s local company, Tcell.

By and large, the Eurasian market has been more trouble than it was worth. In September, TeliaSonera’s President and CEO Johan Dennelind said the company’s  “ambition is to eventually leave the entire region.” The list of problems tied to Eurasia are illustrative: there’s corruption in Uzbekistan regarding access to that country’s telecom market, vagueries concerning to the owners of its local partner companies in Uzbekistan and Azerbaijan and an inability to repatriate over $600 million from Uzbekistan and Nepal, repeated requests from Tajikistan to block specific websites and legislation in Kazakhstan “with potentially serious impacts on the freedom of expression of our customers.”

Nepal is the focus of TeliaSonera’s first serious move to backup its ambition to exit the Eurasian telecom market. The company plans to sell its 60.4 percent stake in Ncell to Axiata for $1,030 million on a “cash and debt free basis.” Simultaneously, according to TeliaSonera’s press release, the company will “dissolve its economic interests in the 20 percent local ownership” for $48 million. Nepalese regulations require that 20 percent of the ownership in companies must be locally held by a Nepalese citizen. Arrangements with TeliaSonera’s partner since 2012, Niraj Shrestha, will lapse and Shrestha will sell his interests to Bhavana Singh Shrestha, Axiata’s chosen local partner.

“To make a responsible exit is of utmost importance for us,” Dennelind says in the statement. “We will continue our good cooperation with the Nepalese government in our engagement of rebuilding Nepal after the earthquake.”

The two deals–which are conditional on each other–are expected to be finalized in early 2016.

While nothing has been said about TeliaSonera’s plans to divest itself of similar holdings in Central Asia, a recent notice from the company belies some of the motivation for doing so.

A “freedom of expression” notice posted to TeliaSonera’s website on December 22 notes that in the fall the General Prosecutor’s Office in Tajikistan asked Tcell, TeliaSonera’s Tajik affiliate, to provide tools for surveillance. The release specifically cites a request “to provide modems with an Internet traffic for technical support of the United State Headquarters on investigation of events connected with armed rebellion also especially serious crimes connected with participation of citizens of the Republic of Tajikistan in the international terrorist organizations in the territory of the foreign countries.” The notices says that there is “no formal legal obligation to provide free facilities” and that Tcell is reviewing the practice of granting the government access.

While the company is careful to note that it does not engage in the politics of the countries it operates it, the notice also comments that “Government’s requests or demands upon operators often serve legitimate purposes, but they may also be problematic.”

What is problematic about this request–which the company cannot say directly–is that it is legitimate to question whether the government of Tajikistan will use such access as it requested (and seemingly received) solely for the purpose of surveilling illegal activities. Tajikistan habitually labels political opposition members, as well as human rights advocates and Muslims practicing outside tightly-controlled state institutions, as extremists. The ubiquity of such a label renders it almost meaningless.