OREANDA-NEWS. July 29, 2010. In addition to Osnova Telecom (Ministry of Defense), another company RET, 25% owned by Rostelecom should receive part of the frequencies for 4G in August, reported the press-centre of OTKRITIE Financial Corporation.

View: Rostelecom already owns frequencies in 39 regions of Russia in the spectrum of 2.3-2.4GHz. In addition, RET should receive frequencies across Russia in the 2.5-2.7GHz spectrum. With the big 3 mobile operators out of the game for the moment, we view this as an attempt to delay deployment of the next generation of mobile communication in Russia. Since MTS and VIP have not used up their 3G resources yet, we see the development in 4G as a removal of potential positive catalysts for the stocks of mobile operators rather than negative news. The rally in Rostelecom shares was overblown as the company owns only a 25% stake in RET and already has frequencies for 4G in 39 regions of Russia.

Action: We expect correction in Rostelecom shares [SELL; TPUSD3.2] and neutral reaction in MTS [BUY, TPUSD34] and Vimpelcom [BUY; TPUSD32].