The Russian state-run telecommunications firm OAO Rostelecom may sign over control over its mobile business after it had entered into an agreement with Tele2 Russian Holdings AB. Tele2 is owned by VTB Group.

According VTB Chairman Andrey Kostin, in an interview on the sidelines of the APEC summit in Bali, "As far as I remember, Tele2 Russia's assets are valued higher. I can't tell whether Rostelecom will get 40% or 49%." He added that an independent appraisal is needed.

VTB had acquired Tele2 Russia back in April for USD2.4 billion. It is now in the process of entering into a joint venture with the mobile assets of Rostelecom to create a carrier with nationwide access. This was confirmed by VTB Deputy Chairman Yuri Soloviev last week, saying Tele2 Russia may consider "M&A activities" by year's end, without providing any further information on the matter.

A merger between Tele2 Russia and Rostelecom's wireless unit would result in a company that would have the fourth largest mobile operator in Russia. The new company would challenge the dominance of OAO Megafon of billionaire Alisher Usmanov, OAO Mobile Telesystems of billionaire Vladimir Evtushenkov and VimpelCom of billionaire Mikhail Fridman.