On Thursday Telenor submitted a request to Russia's Federal Antimonopoly Service (FAS) to allow it to increase its stake in VimpelCom to 45% from 26.6%, according to the filing.

If the FAS allows Telenor to increase its stake, permission would be valid for 12 months, according to the filing.

Analysts said that this move could be interpreted as a sign that Telenor and other major shareholder Alfa Group may be in the process of coming to a deal. The two have been locked in a conflict over VimpelCom’s entry into Ukraine.

Telenor has been using a blocking stake on VimpelCom’s board of directors to stop a purchase of Ukrainian Radiosystems, a mobile operator with a subscriber base of around 50,000. Telenor owns 56.51% in Kyivstar, Ukraine’s second-largest mobile operator, and is opposed to creating any direct competition.

Alfa Group, which owns 32.9% in VimpelCom and 43.49% in Kyivstar through local subsidiary Storm, has been pushing for the purchase of Ukrainian Radiosystems to go ahead.

”It is tempting to argue that the move by Telenor points to a soon-to-be-announced deal with Alfa leading to an increase in Telenor’s interest in Vimpelcom, either through a merger with Kievstar or a simple buy-out of Alfa,” United Financial Group said in a report Friday.

Alfa Group selling out could be the catalyst it needs to improve business in other areas, analysts said.

”Alfa divesting its Russian telecoms assets looks reasonable given: (1) it has recently had very tense relations with the Communications Ministry, making the chances of a successful bid for Svyazinvest seem remote; (2) it has faced huge obstacles to its plan to make Vimpelcom Russia’s No. 1 operator through its merger with Megafon; and (3) Alfa and Telenor seems to be at an impasse over Vimpelcom’s entry into the Ukrainian market,” Aton Capital said in a report Friday.

However, a complete sell out, and perhaps even a deal of any kind, is still a long way from completion, analysts said. “In our view, Telenor's application is more an indication that it intends to secure control of the mobile carrier in the long run, rather than a sign that Alfa has agreed to leave the company,” Troika Dialog said in a report Friday.

© "Prime-TASS"