OREANDA-NEWS. July 26, 2010. The CEOs of Russia’s big three mobile operators MTS, Vimpelcom and Megafon reportedly sent a letter to Prime Minister Vladimir Putin asking him to step into the allocation process for 4G licenses and frequencies, reported the press-centre of OTKRITIE Financial Corporation.

View: Reportedly, the decision has already been made to give 2.3-2.4GHz frequencies without a tender to Osnova Telecom, a company indirectly owned by the Defense Ministry. The mobile operators have intensified their efforts to have the decision reversed, calling for a clear and transparent tender process. We expect a final decision on 4G licenses and frequencies by the end of August.

Action: We expect neutral reaction on MTS and Vimpelcom stocks. However, confirmation of a non-transparent handing 4G frequencies could have a negative impact on share prices of both companies, raising serious questions about the regulatory environment in Russia.