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Russian-Norwegian telco partnership goes cold

by on01 December 2008

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Tale of two mobile phone outfits


Telenor of Norway
and Altimo of Russia are in court in the Siberian city of Omsk over a post-Cold War relationship that turned sour.

The pair were the best of chums until 2004 when they had a tiff about how to invest in Ukraine. Telenor opposed Altimo's plan for VimpelCom, their partnership in Russia, to buy a Ukrainian mobile operator, Ukrainian Radio Systems. Telenor worried about damage to its partnership with Altimo in Ukraine called Kyivstar.

Since then there has been a standoff reminiscent of the Cold War, with both sides claiming that the other is spying on them and legal skulduggery on three continents. However, it has become a row involving  powerful business and political interests involved on both sides.

Telenor is 54 percent owned by the Norwegian government. Altimo is controlled by Mikhail Fridman, a Kremlin ally and the chairman of Alfa Group, one of the largest telecommunications investors in Russia. Altimo has been winning its battles in Russian courts, something that Telenor has contested, saying the companies had agreed under their partnership to settle disputes by arbitration in Geneva and New York, rather than Russia and Ukraine.

Telenor has sued Altimo in New York and Altimo has countered with its own lawsuit against Telenor in Geneva. Recently, in Omsk, Telenor is appealing the ruling of a Russian trial court judge in the Siberian town of Khanty-Mansiysk.  He ordered Telenor in August to pay $2.8 billion for trying to obstruct VimpelCom's takeover of URS.

Judge, E.A. Karankevich made the ruling at 2 A.M. and famously said he was going to fine Telenor $5.7 billion before anyone started arguing the case. Altimo denied that the Russian trial judge had improperly set fines before hearing the case and just said the Norwegians were mocking the glorious Russian legal system.

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Last modified on 01 December 2008
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