MOSCOW (WiMAX Day). The private Russian investment and media holding company PromSvyazKapital announced last week that it acquired 100% of the share capital of Synterra, the third largest telecommunications network provider and largest WiMAX service provider.

The shareholders of Synterra were reported as Eventis Telecom, which is controlled by the Russian businessmen Vladimir Androsik and Dmitry Ivanter, and the Swiss private equity fund Emergent Telecom Ventures SA, which is run by investment banker Mohammed Amersi and Juan Villalonga, the former president of Spain’s Telefonica Group.

Synterra owns Komet, the alternative fixed-line telephone operator in Moscow, and a diverse portfolio of operations that include call centre management and data access. Synterra also owns RTKomm.ru, one of Russia’s largest Internet access providers. Synterra first launched pre-WiMAX services in Moscow last year, and is today the leading provider of WiMAX services.

According to a press release from PromSvyazKapital, group president Pavel Khokhryakov stated that one of their primary interests in Synterra is the further development of WiMAX opportunities. PromSvyazKapital own media and television assets that they hope to integrate with Synterra.

Largest WiMAX network in Moscow
Synterra has been one of the most active companies developing WiMAX in Russia, and it runs the largest network of WiMAX services in Moscow. The company began its services using 5.8 GHz spectrum, and now reports that it has changed its network in Moscow to utilise 2.5 GHz spectrum. Synterra use CPE equipment from Motorola subsidiary NextNet Wireless (formerly a Clearwire subsidiary).

In an announcement made yesterday, Synterra claim that by the end of 2006 it will cover 95% of Moscow with its WiMAX network, increasing its base stations to more than 60. Synterra has deployed its network mainly in office buldings and large companies throughout Moscow. The company plans to further develop a home access program in 2007.

Synterra also plans to enable ten WiMAX hot-spots along the main subway lines in Moscow. Other efforts by the company include the connection of 128 local schools in Moscow to their WiMAX service.

Synterra has thus far invested a reported $3 million in its WiMAX network, and according to the company, for the first six months of 2006 realised a profit of $850,000 from its WiMAX operation. Synterra intend to invest an additional $4.5 million over the next twelve months to extend its service to the suburbs outside of Moscow.

A fair valuation
The price paid by PromSvyazKapital in acquiring the shares of Synterra were not divulged by either party in the transaction. However, investment analyst Andrei Bogdanov at Trioika Dialogue estimates that the purchase price was a minimum of $280 million. Meanwhile, Aleksander Kazbeji, an analyst at Renaissance Capital in Moscow, estimates the purchase price to be in the range of $300-350 million.

Both analysts commented in Kommersant that in this price range, a fair price was paid for Synterra, and in fact PromSvyazKapital, which is known for efficient management, will be able to improve the margins of the business and will invest significantly more to boost the market profile of the company in the WiMAX sector.