UPDATE 2-Kremlin backs Kalugin to become next Rostelecom CEO

* Kalugin to replace Provotorov after months of speculation

* Ran firm that Rostelecom bought from Kremlin-loyal tycoons

* Rostelecom may decrease its mobile appetite after CEO switch

(Writes through, adds analyst comment, background)

By Darya Korsunskaya and Maria Kiselyova

MOSCOW, March 27 (Reuters) - The Kremlin has backed former cable TV boss Sergei Kalugin to become the next chief executive of state-controlled Rostelecom , in a leadership change that could herald a strategic shift away from Russia's cut-throat mobile sector.

The ex-head of National Cable Networks, which was owned at different times by businessmen with connections to the Kremlin, is set to replace out-of-favour Rostelecom CEO Alexander Provotorov, who has been under fire for months.

"I don't know when his candidacy will be approved but I can say his candidacy was agreed," President Vladimir Putin's spokesman, Dmitry Peskov, told Reuters on Wednesday.

The telecoms operator was due to hold a board meeting on Wednesday, and a source close to the board said that although the CEO change was not on the original agenda of the meeting, it could be included "at any moment".

Provotorov came under fire after a cabinet reshuffle last May, with the new government, formed after Putin was elected for a third Kremlin term, criticising Rostelecom's weak share price and plans to expand in the competitive mobile market.

Speculation that Provotorov may be on his way out emerged in November when his home and the house of his former partner and Rostelecom investor Konstantin Malofeyev were searched by police in a fraud probe unrelated to Rostelecom.

The rumours flared again in early March when Malofeyev's Marshall Capital Partners, which Provotorov used to run, sold its 10.7 percent stake in Rostelecom to Arkady Rotenberg, a construction tycoon close to Putin.

Rotenberg's purchase was the latest in a string of acquisitions by oligarchs who have grown rich since Putin rose to power in 2000, while those who made their fortunes in Russia's chaotic 1990s are increasingly cashing out.

Kalugin has no apparent business links to Rotenberg, but the latter has had common business interests with former owners of National Cable Networks - metals tycoon Suleiman Kerimov and banker Yury Kovalchuk. In 2011, the TV operator was acquired by Rostelecom.

Analysts welcomed that a proven communications industry boss would take the helm at Rostelecom, but were looking for indications on the direction in which Kalugin would take the company.

STRATEGY CHANGE

The former fixed-line monopoly was transformed in 2011 into a universal operator by merging with several regional peers to boost its presence in high-growth areas such as broadband, mobile and Pay TV and offset declines in its core business.

Last summer, it was awarded an LTE mobile licence to offer high-speed data downloads on mobile devices and rival established mobile competitors MTS , MegaFon and Vimpelcom which also were winners in the tender.

While officials have suggested Rostelecom should focus on building out Russia's backbone Internet infrastructure, Provotorov defended the mobile ambitions in a recent interview with Reuters, saying growth in fixed broadband was flattening out, unlike wireless broadband.

Kalugin has a good understanding of the fixed-line business, said Ivan Kim, an analyst at VTB Capital. But as he lacks experience in the mobile sector, Rostelecom is unlikely to be aggressive in this market, he added.

Russia's government owns 53 percent of Rostelecom which has a market value of around $12 billion. The company is expected to be privatised after its restructuring is completed and list its shares on the London Stock Exchange.

(Writing by Maria Kiselyova; Editing by Douglas Busvine and Susan Fenton)

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Keywords: RUSSIA ROSTELECOM/CEO