Now Mikhail Fridman Wants to Own $25 Billion in Western Telecoms

Frankly, if I had the cash, that's what I would have done.

Mikhail Fridman

Billionaire Mikhail Fridman is looking to invest $16 billion in telecoms businesses in the West, and he’s enlisted a substantial advisory board of industry players to help him get the job done, The Financial Times reported.

Fridman’s switch from North Sea gas and oil to telecoms and technology is probably the result of the bloody nose the tycoon received from his confrontation with the British government, which suspcted him of doing President Vladimir Putin’s bidding when his LetterOne Energy purchased a dozen North Sea fields. In the end, Fridman, guilty or not of those accusations, had to abandon those fields.

So now Fridman has set up his LetterOne Technology (a pattern emerges, right?) as a private equity-style group to invest $16 billion in telecom and technology.

CEO Alexey Reznikovich believes the “old fashioned” telecoms must undergo a thorough overhaul to start making real money for investors. His new fund has no debt, which means they could leverage their $16 billion up to as much as $25 billion by just parading it around the lending institutions.

Fridman’s board for the new venture will include co-founder Brent Hoberman, Irish telecoms entrepreneur Denis O’Brien, former Google payments executive Osama Bedier, former Skype executive Russ Shaw and Vodafone co-founder Sir Julian Horn-Smith, the FT reported.

CEO Reznikovich wants to pick up traditional telecoms that are in financial trouble internet companies making apps, and streaming services that just sit there, streaming away with little cash coming in from potential subscribers.

Frankly, if I had the cash, that’s what I would have done.

Now, do you think L1-Technology will piss off her Majesty’s dedicated civil servants just like L1 Energy did? No doubt whatsoever, and then some. Imagine Fridman’s juggernaut fund coming to your neck of the woods and starting to buy up the very companies that give you, say, your presidential primary debates—would you feel concerned? Would you Congressman?

Nevertheless, Reznikovich believes European telecoms businesses, at least, will die if they don’t change their “incumbent mindset.”

For instance, how come they aren’t using their “deep knowledge of their customer base” to offer them, say, banking services? Why the heck not?

The FT expects Brent Hoberman, probably the best-connected tech investor in Europe, to lead the way for Boss Fridman. And he also happens to be on intimate terms with the UK government, nudge-nudge, wink-wink.

So, your next TV hour of pure family joy could be served to you care of Vladimir Putin…


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