USM Telecom and MegaFon, in cooperation with partners from Uzbekistan, are creating Digital Holding, a joint venture designed to become the technological leader of the largest telecommunications market in Central Asia. The joint venture will comprise the country's telecommunications market leader Ucell and USM’s Uzbek assets CRPT Turon and ICS Holding Uzbekistan.

The Government of Uzbekistan, through the Agency for State Assets Management (ASAM), will transfer 100% of the authorized capital of the telecom operator Ucell into the joint venture. The Russian side will contribute $100 million investments into Digital Holding, as well USM Uzbek subsidiaries CRPT Turon and ICS Holding Uzbekistan.

To enter the joint venture USM Telecom and MegaFon created the company “Digital Invest”, with each holding an equal share in it. Digital Invest’s stake in the new joint venture will be 51%, ASAM’s stake - 49%.

The transaction will be finalised during 2021. Digital Holding will focus on developing telecommunications infrastructure in accordance with international standards to expand access to communication services in the Republic of Uzbekistan and improve their quality. It will also focus on the introduction of advanced technologies and systems in the areas of information security and data storage, labeling and control of the movement of certain types of goods.

Ivan Streshinsky, CEO of USM Telecom, commented: “The creation of a leading player in the digital services market in Uzbekistan is in line with both MegaFon’s and USM Telecom’s strategy, which is to build a technology leader in the CIS and Eastern Europe. We are confident that the long-term expertise in implementing digital projects, which MegaFon, CRPT and ICS Holding have, will help develop the largest market player in Uzbekistan."

Gevork Vermishyan, CEO of MegaFon, said: “In terms of consumption of digital services, Uzbekistan is one of the most promising markets in the CIS, having shown a more than threefold increase in mobile subscribers over the past 10 years, yet still remaining far from saturation. We are not planning major structural changes within Ucell in 2021; we will rather focus on finding synergies and implementing best practices in Ucell to grow its business.”

Olimjon Umarov, Advisor to the Prime Minister of the Republic of Uzbekistan, added: “I am confident that the creation of joint venture will give a new impetus to the rapidly developing market of digital services in Uzbekistan in coming years and will open up new opportunities for Ucell and its subscribers.”