MegaFon, Russia's second-largest mobile phone operator, is seeking permission for a £2.5bn float in London, the world's biggest since Facebook listed in New York in May.
Russia's richest man, Alisher Usmanov, who took control of the company in April, is reported to have asked the local regulator for permission for the flotation, which could be launched within three or four weeks.
That would give investors the chance to buy into a firm that has positioned itself aggressively for the rollout of high-speed mobile data services loved by smartphone-toting urban Russians, and which is backed by the impeccable Kremlin connections of Usmanov, the Arsenal FC shareholder whose fortune is estimated by Forbes magazine at $18.1bn (£11.4bn).
Russia is one of the world's busiest mobile phone markets, with the third-highest penetration in the world behind the United Arab Emirates and Panama. The country's 227m mobile subscriptions cover over 150% of the population because almost all of the 144 million inhabitants have a mobile phone, with many owning more than one working SIM card. Megafon has 63m subcriptions.
MegaFon has requested permission from Russia's financial markets regulator to list up to 123m shares abroad, equivalent to 19.9% of the company, according to Reuters. "We are considering the possibility of holding an IPO," MegaFon said in response to questions from the news agency. "The timing of the public offering will depend on market conditions."
The float will see Teliasonera, the Swedish carrier, reduce its stake in Megafon to 25.1%.
Competition is fierce in Russia among the three main networks - MTS, Megafon and Vimpelcom - with MTS having about 70m subscriptions and Vimpelcom 56m. Five other networks have around 38m subscriptions between them.
Investors will be keen to buy a slice of the fast-growing company, analysts said, which comes as the mobile operators jostle for position in the race to sell 4G (fourth-generation) mobile services to the public.
In July, Usmanov increased his influence in Russia's telecoms sector by combining his MegaFon stake into a holding company he controls that will own state-backed next-generation operator Scartel.
The same month MegaFon was one of four companies to win a 4G licence, allowing it to provide superfast wireless internet using the LTE service, which is expected to become the global industry standard. In May it had used Scartel's network to launch LTE services in Moscow.
"MegaFon looks attractive because it is the leader on the Russian mobile internet market," Sergei Libin, Moscow-based analyst at Raiffeisen.
"MegaFon's IPO is likely to be one of the few positive Russian stories due to the combination of healthy business growth and good corporate governance," said Tibor Bokor, a London-based analyst at ING.
It would be the largest IPO by a Russian company since state bank VTB raised $8bn in 2007. Notable Russian IPOs since include aluminium group Rusal's $2.2bn listing in Hong Kong in 2010 and internet search engine Yandex's $1.4bn float on the US Nasdaq exchange in May 2011.
Waiting in the wings is Sberbank, Russia's largest bank, after forecast-beating quarterly results last week raised the likelihood that the often-delayed sale of a 7.6% state holding worth $5bn would go ahead.
Mid-sized lender Promsvyazbank has also sought clearance from the regulator to float up to 25% in London in a deal managers have said could raise $1bn.
A MegaFon IPO would be a defining deal for Usmanov, an Uzbek-born metals and mining magnate who has shown a deft touch as a tech investor and made 10 times his money investing in Facebook stock three years before it listed.
But the enthusiasm for new technology offerings may have been dimmed by the dismal performance of Facebook shares after its $16bn offering: the shares floated at $38 but are now trading below $18, even while global stock markets have drifted higher through the summer.
One source close to the deal said a launch of the IPO is probably three to four weeks away. MegaFon CEO Ivan Tavrin signalled in June that an IPO was some way off due to difficult market conditions.
Sources have previously said Goldman Sachs and Morgan Stanley had been appointed to lead the IPO. Other banks including Sberbank, Citi, Credit Suisse and VTB are also involved, sources and Reuters publication IFR have said.
Megafon is also in negotiations to buy a stake in Russian mobile phone retailer Euroset, Reuters said. Euroset co-owner Alexander Mamut has been looking to sell his 50.1% stake since last December.
MegaFon is majority owned by Usmanov's AF Telecom, which holds 50% plus one share of the company, while 35.6% is owned by Teliasonera, and 14.4% is held by the company as treasury stock.
Teliasonera spokesman Thomas Jonsson confirmed that preparations for the MegaFon float were continuing but declined to elaborate.
Analysts said valuation was more important than timing to TeliaSonera.
"Telia has been saying that it is dependent on market conditions and they are not particularly happy with the peer-group multiples of Russian assets as things stand," said James Britton, an analyst at Nomura Securities in London.
"Our view is that we certainly expect there to be some delay," he added.
