OREANDA-NEWS. October 3, 2011. Rostelecom (MICEX, RTS: RTKM, RTKMP; OTCQX: ROSYY) has acquired 50% of Volgograd GSM’s common shares from the SMARTS Group of companies for RUR 2.32 bln, which is equal to RUR 80.5 mln according to the official exchange rate quoted by the Bank of Russia on the date of the transaction, thus raising the operator’s stake to 100%.

Volgograd GSM is a provider of GSM cellular services in the Volgograd region. The company’s coverage area spans 33 districts of the Volgograd region (with a total population of 2.6 mln people) and comprises 90% of the total area of the region.

As of the end of the first quarter of 2011 the number of cellular telephony subscribers of Volgograd GSM stood at 855,000. The company’s market share of its coverage area was about 20% as of year-end 2010, according to company data.

Volgograd GSM’s RAS revenue for full-year 2010 amounted to RUR 1,748 mln. EBITDA reached RUR 708 mln, and EBITDA margin stood at 40.5%. The operator’s net debt was equal to RUR 340 mln as of March 31, 2011.

According to the Rostelecom CEO Alexander Provotorov, “after having raised its equity stake in Volgograd GSM to 100%, Rostelecom will gain complete control over the operator, which will make it possible to more rapidly expand the rollout of cellular services in the Volgograd region, integrate the company with other cellular assets of the Rostelecom Group of companies, and also consolidate the operator’s financial and operating performance in the financial statements of Rostelecom.