Private Equity Russia

UFG Private Equity and the EBRD are reportedly investing $30 million into a new cell tower company founded by seasoned American telecom entrepreneur Garth Self.  The company, Russian Towers, will build spec cell towers and lease them to operators seeking to roll out 4G service in Russia’s North West Federal District.

Garth Self previously founded MCT Corp./Indigo Mobile Group.  This project sought to create a national cellular network, but was unsuccessful and sold it’s assets to various regional telecom groups and to Svyazinvest.

Analysts estimate that the current committed investment will allow for the construction of approximately 350-400 sites.

Third party cell tower companies are common in America, but this will be a relatively new model for Russia.  Given existing coverage in the region of the established players, rental of the sites will depend largely on adoption of the new 4G technology and market entry by new, second-tier players.  Both could mean success for Russian Towers.

UFG invested through UFG Private Equity Fund II, which has total assets of  $160 million dollars. EBRD is a co-investor in the fund and holds approximately 30% of its shares.  In December, the fund acquired Rising Star Media, co-owner of the luxury cinema chain Kinostar de Lux.

[Via RBC Daily]

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