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The Funds’ first investment in telecommunications was made in 1994 in FGI Wireless (which eventually became today’s Vimpelcom, one of Russia’s largest mobile telephony operators). The company was a pioneer in cellular network development in Russia. Since 1994, Baring Vostok funds have invested over $850 million in 30 companies in the internet, software, media, and telecommunications sector.
Golden Telecom

Golden Telecom

Leading digital telephone communication operator and Internet access provider in Russia and Ukraine (now a part of Vimpelcom). Fully exited in 2007
www.goldentele.com
Loction:
Moscow, Russia
Years:
1995-2007
Shareholding:
Minority
Exit:
IPO on NASDAQ

Golden Telecom became one of the leaders among alternative communication and data transfer network operators in Russia, Ukraine, Kazakhstan and Uzbekistan. In 2008 Vimpelcom purchased 100% of Golden Telecom shares.

In 1983, San Francisco Moscow Teleport (SFMT), a non-commercial Soviet-American project of cooperation in the telecommunications field, was launched. In 1993, SFMT changed its name into Global TeleSystems. The First NIS Regional Fund became one of the first shareholders of GTS in 1995.

Development stages:

  • Between 1995 and 1999, GTS grew rapidly and purchased companies specialising in different kinds of telecommunication services, including Sovintel, TCM and Teleross. The Fund invested in GTS and also financed the foundation of an affiliated company in Ukraine. At the same time, GTS began investing in telecommunication projects in Western and Eastern Europe, so the strategic focus gradually moved to Europe.
  • After the 1998 financial crisis in Russia, GTS decided to separate its Russian operations and create a new entity. In 1999, the First NIS Regional Fund sold its shares of GTS and converted its shares of Golden Telecom Ukraine into the shares of the new company (Golden Telecom). Baring Vostok Private Equity Fund also became an anchor investor in Golden Telecom’s IPO in October 1999.
  • In 2001, Baring Vostok Private Equity Fund bought the remaining Golden Telecom shares from GTS in a joint deal with Alfa Bank and Capital International. The strategy of the company was revised and major changes were also made to the company’s management structure.
  • In 2002, Golden Telecom bought out the shares of Sovintel from its partner Rostelecom, and completed the transition to a single, unified business platform.
  • In 2003, Golden Telecom was launched as a unified nationwide brand, under which the renewed and enhanced Sovintel continued its work on the Russian market.
  • Between 1999 and 2002, average annual sales growth was 27 percent, while between 2003 and 2005 it was 53 percent.
  • In 2007, the volume of sales was over $900 million, 9.5 times higher than the figure for 1999. Over the same period, annual profit increased sixfold.
  • In 2007, Golden Telecom was acquired by Vimpelcom.

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