Telenor holds 26.6% of shares in VimpelCom (RTS: VIMPG) and Altimo, the telecoms arm of financial giant Alfa Group, holds a 32.9% stake.
Jan Edvard Thygesen, executive vice president and head of Telenor in Eastern and Central Europe, said after a meeting with Altimo that the mechanism was based on a series of auctions.
VimpelCom, is best known for the Beeline trademark in Russia and Kazakhstan, and also has newly acquired operations in Ukraine, Tajikistan and Uzbekistan.
Thygesen said that Altimo had agreed to launch the mechanism when a deal on the acquisition of Ukrainian mobile operator Kyivstar is completed. Altimo earlier opposed linking the mechanism to the Kyivstar acquisition deal.
Telenor's proposal on Kyivstar involved VimpelCom's acquisition of 100% in the company for at least $5 bln in cash. VimpelCom proposed in February to acquire 100% of Kyivstar shares for $5 billion of its own shares.
A conflict between Telenor and Alfa Group first erupted over VimpelCom's plans to enter the Ukrainian cell phone market.
Alfa Group supported a VimpelCom deal to acquire Ukrainian Radio Systems, a leading cell phone operator in Ukraine. However, Telenor was against the deal, saying it was overpriced.
The deal was struck in the fall of 2005, but in January 2006 Telenor filed three lawsuits with a Moscow arbitration court against VimpelCom to challenge it.
Earlier, Altimo asked the Federal Antimonopoly Service to allow it to increase its stake in VimpelCom to 60% plus one voting share, and Telenor approached the service with a request to raise its ownership in the cell operator to 45%.
Telenor said that if Altimo's application were granted, the company would control 52% of the cell market in Russia, more than 54% in Moscow, and more than 59% in St. Petersburg, with similar effects to be felt in other Russian regions. Moreover, in addition to the controlling stake that Altimo aims to obtain in VimpelCom, the company currently holds a blocking share in MegaFon, Russia's third cell phone operator.
Telenor said this dominant position on the market would restrict competition, push up prices, and bring down the quality of cell phone services.
