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bne February 2019 Eurasia I 75
MTS’s licence for communication services was valid until July 26, 2018 and as of the end of the second quarter of 2017, MTS provided services for 1.7mn people in Turkmenistan. But
a year before the licence was due
to expire MTS services were shut down for a third time. According
to bne IntelliNews’ sources close to
the company, the government and
its organs have not approached the company nor responded to requests for negotiation to resolve the dispute.
“It is disappointing that the good faith efforts are not reciprocated in any way by the state,” a bne IntelliNews source said. “MTS is being forced to withdraw and is making a claim in the ICSID. However, MTS remains open to engage in talks to reach a resolution and is willing to negotiate.”
The dispute looks more serious than the previous showdowns as MTS says it is packing up its equipment and taking it home. The state is facing the prospect of transferring the licence to someone else, but the new operator would have to start from scratch and invest hundreds of millions of dollars in rebuilding the base station network.
Investing in telecoms in Central Asia is fraught with problems due to the corrupt and unpredictable governments there.
MTS, along with another Russian operator VEON (previously VimpelCom) and Nordic telecom giant Telia, were accused of paying bribes to win 3G and 4G licences in Uzbekistan to the former president’s daughter, Gulnara Karimova, who is now in jail. VEON has already been fined $795mn by the US and Dutch authorities in the case and MTS booked a RUB37bn ($536mn) loss on its Uzbek operations in the third quarter of 2018 after settling its own claims. Telia exited the country completely in 2017.
The dispute in Turkmenistan is unlikely to affect MTS’s share prices as the operation there contributed only 1.15% of the group’s revenue in 2016, according to MTS. It has received no revenue from the subsidiary at all since the September 2017 shut down.
Velvet revolutionary’ Pashinian clear victor in Armenia’s general election
bne IntelliNews
The My Step Alliance led by Armenia’s ‘velvet revolutionary’ Nikol Pashinian won 70.4% of the vote to win the Armenian parliamentary elections on Decem- ber 9, according to the country’s Central Election Commission (CEC).
The centrist bloc, which includes Acting Prime Minister Pashinian’s Civil Contract Party, was declared the winner of the poll based on results from all polling stations, the CEC said.
Two moderate opposition parties – Prosperous Armenia led by tycoon and arm- wrestling champion Gagik Tsarukyan, which was part of the previous ruling coalition, and Bright Armenia, a liberal, pro-Western party – received enough votes to clear the 5%-threshold to enter parliament. The Republican Party (HHK), which dominated Armenian politics for two decades before the government was ousted during Arme- nia’s people power revolution led by former activist and newspaper editor Pashinian in the spring, took just 4.70% of the vote – it was not clear whether it would neverthe- less manage to gain parliamentary representation in line with constitutional rules that mean 30% of seats in the 101-seat legislature must go to opposition parties.
Lot of optimism
Armenia's elections have in the past three decades become known for fraud and vote-buying, but there appears to be a lot of optimism that this one will prove to have been different. International observers from the Organization for Security and Co-operation in Europe (OSCE) were among those monitoring the poll.
On the downside in the contest, turnout was low at around 49%. That likely reflected some complacency among potential voters that Pashinian’s bloc was the hot favourite to win and some despondency among remaining HHK voters who realised they were on a hiding to nothing.
Despite the revolution that cleared the way for Pashinian to form a govern- ment, parliament remained under the control of HHK. Pashinian thus called a snap general election to ensure parliament would shift to representing the new political realities in Armenia.
“Armenian citizens have created a revolutionary majority at the parliament,” Pashinian told reporters at his bloc’s headquarters after first results were published, news agencies reported.
“If this trend continues, the majority won’t face any problems in implementing legislative changes,” he added.
Pashinian arrives with his wife and daughters to vote at a polling station in Yerevan.
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