MOSCOW – Russian investment group Alfa Group said yesterday it had outbid TeliaSonera for a stake in Turkey’s top mobile phone firm Turkcell, opening a new front in the pair’s bitter business rivalry. TeliaSonera has agreed with Turkey’s debt-laden Cukurova group to pay $3.1 billion for a 27 percent stake in Turkcell, which has 23.4 million customers and controls 70 percent of the Turkish market, but Alfa said it had gone one better. «We have made an offer… to buy the same stake for a higher sum,» Kirill Babayev, vice president at Alfa’s telecoms arm, told Reuters. He declined to elaborate. The Nordic telecoms firm said it still expected to complete the purchase of the Turkcell stake from the Cukurova group, raising its holding in Turkcell to 64.3 percent. «We have an agreement with Cukurova to buy the remaining shares in Turkcell Holdings, and that deal will be completed,» TeliaSonera spokesman Mikael Kongstad told Reuters. Cukurova was unavailable for comment. By midafternoon, TeliaSonera shares had dipped 0.7 percent on news of the rival bid by Alfa Telecom, part of the investment group controlled by Mikhail Fridman, who is ranked by Forbes magazine as Russia’s second-richest man. Turkcell said the purchase of 27 percent of the firm by TeliaSonera would be on the agenda of its AGM on April 29. The stock exchange had suspended trading in Turkcell temporarily ahead of the announcement, and after its reopening it was trading at 9.35 new lira, up 5.1 percent, on the prospect of a bidding contest between TeliaSonera and Alfa. Russian rivalry Alfa Group is already at daggers drawn with TeliaSonera and its allies over the ownership of a one-quarter stake in Russia’s No. 3 mobile phone firm MegaFon. Alfa bought the stake for 230 million euros from investment boutique LV Finance in 2003, but Bermuda-based investment fund IPOC – now allied to TeliaSonera – has challenged the deal in the courts, arguing it had a prior option to buy the shares. The dispute has turned ugly of late, with police raiding Alfa Telecom’s office in a fraud probe and prosecutors grilling LV Finance’s head, Leonid Mayevsky, who has fled Russia. Mayevsky has accused Russian officials close to Telecoms Minister Leonid Reiman of being linked to IPOC and of instigating the fraud probe. Reiman has denied any role. Analysts say the conflict has prevented Alfa from merging MegaFon with Russia’s No. 2 mobile company Vimpelcom, which it controls, to create a company big enough to displace market leader MTS. Undermining TeliaSonera They also said the Alfa bid for Turkcell was most likely an attempt to weaken TeliaSonera’s position in the MegaFon conflict. «TeliaSonera is very interested in the asset,» said Renaissance Capital analyst Olga Zhilinskaya. «This is most likely a PR stunt… an attempt to solve the MegaFon problem.» She said that if Alfa bought the Turkcell stake, it could offer to swap it for TeliaSonera’s stake in MegaFon. TeliaSonera wants to increase its stake in Turkcell to get a firmer footing outside its mature domestic markets, where growth opportunities are limited. A mobile boom in Russia, Vimpelcom’s home market, is winding down and the company has said it was looking for markets outside Russia, although primarily in the CIS. Turkey is the top holiday destination for Russians, promising juicy roaming fees. Vimpelcom has operations in Kazakhstan while market leader MTS works in Ukraine, Belarus and Uzbekistan. Analysts said they expected the deal between TeliaSonera and Cukurova to hold, though the rival bid could force the price up. «I don’t think Cukurova would like to sell to Alfa in light of the ownership battle going on in Megafon,» another analyst said.