Tele2 has signed a contract with Kazakhtelecom to acquire a 51 percent stake in Kazakh operator Mobile Telecom Service, which operates on the local market under the Neo brand name. Tele2 will pay in cash approximately SEK 550 million for 51 percent of the shares and commit to a capital injection of around SEK 360 million once the transaction is completed. Tele2 will also have the option to buy the remaining 49 percent after five years from closing. Neo will be consolidated into the Tele2 group and will benefit from Tele2's brand marketing and product strategies. Neo has around 380,000 subscribers or an about 7 percent market share, making it the third operator on the market, a Tele2 spokesman told Telecompaper. Tele2 plans to relaunch the operator with a new marketing campaign within the next year. Tele2's targets for Neo include a market share of at least 20 percent within four years of the relaunch, EBITDA breakeven within 2-3 years and capex of SEK 2.4-2.6 billion in the period 2010-2103.
