Cyprus court case forces Vodafone to halt Telsim roaming income

A decision by a Cypriot judge to block the roaming income of Telsim, the Turkish telecom that was recently acquired by Vodafone has forced the British multinational from transferring such roaming income generated in Europe to Turkey, raising a barrage of protest among Turkish circles.

A Cyprus court granted an interim order request filed by a Cyprus based company, Rosamara Ltd., against Telsim Mobil demanding full payment on over USD 738 mln in bearer promissory notes that were issued by Telsim in 2003. The law firm of Michael Michaelides, representing the interests of Rosamara Trading Ltd. managed to win court approval, ordering Telsim from transferring, leasing or mortgaging its assets. The interim order also orders Telsim from collecting or demanding payment of any sums of money up to USD738 mln generated from SMS, international, GPRS, voice mail and Roaming revenues from up to 20 telecom companies operating in the EU including most Vodafone subsidiaries.

The Anadolu News Agency reported that Vodafone Germany did not transfer the roaming income of Telsim to Turkey because of the pending court order secured by Cyprus based Rosamara.

In response to a written request by Vodafone Germany, the law firm of Michael Michaelides told Vodafone that it would be in contempt of court if they transferred the income of Telsim generated abroad to Turkey. The court order was issued in Cyprus on April 28, 2006.

The bearer notes matured earlier this year and are secured by the assets and roaming income of Telsim, Turkey’s second largest cell phone operator. Telsim’s operations were taken over by Turkey’s state deposit insurance fund (SDIF) in 2004, after the bonds were issued and entered on the corporate books. Several months ago the SDIF conducted a public auction of Telsim’s assets and received bids from telecom groups located in Europe, the Middle East and Russia. The winning bid of USD 4.5 bln was submitted by British telecom giant Vodafone.