Rostelecom

active

JSC Rostelecom was created as the monopoly national operator of domestic long-distance and international telecommunications in Russia. It owns and operates an up-to-date nationwide digital trunk network and controlls 93% of the international and domestic traffic. Outside of Moscow, Rostelecom acts as a "carriers’ carrier" - interconnecting all local public operators ’networks into a single transnational network. In Moscow, Rostelecom provides fixed-line domestic long-distance (DLD) and international (ILD) services to end-users through the last-mile infrastructure of a local operator, and bills customers directly. Rostelecom is the only Russian operator licensed to carry both outgoing and incoming international traffic. The Company has interests in 30 international cable systems and cooperates with 400 international operators. Domestic long-distance (DLD) traffic contributes 34% to Rostelecom revenues. Outgoing international long-distance (ILD) accounts for 30%, and payments from international operators for the incoming international traffic account for 18%. The remaining 18% of revenues is derived from the leased line business, telex, telegraph, TV, radio broadcasting, etc. The company was partially divested in 1993 under a mass privatization program. Svyazinvest - the State-controlled holding company held 38% of common shares and 51% of the voting shares. The company was licensed to be the exclusive provider of long distance services until 2004. Rostelecom was involved in joint ventures with foreign partners providing digital, cellular, data transmission services as well as radio and television broadcasting. Rostelecom also owned 50% of Sovintel and Westelcom by 1998. The partially privatized company operated 400 million km of long distance telecommunications channels by 1998. It also had 26 million local lines - including 24 million of which are active- operated through 22 regional branches and 10 international switching centers across Russia. The company used a grid network in European Russia, while it uses radial-node lines in Siberia. The majority of the network was analogue with a digitalization rate of 30% in 1996. The company's main competitors were Sovintel, Westelcom, Comstar, and Combellga by 1998. Its principal projects were the Central and Southern fiber-optic cable projects which will cost a total of $630 million by 1998. Rostelecom was also involved with foreign partners for some projects such as 50x50 and Globetel. The company's main sources of financing were supplier credits, accelerated depreciation, cash flows, Eurobonds, and ADRs by 1998. As of Aug. 2000, Rostelecom took over the Moscow Long-Distance and International Telephone (MMT) company, one of the major long-distance and international service provider of Russia. MMT ceased to exist in the end of Aug. 2000, and its activities were undertaken under the Rostelecom brand. In June 2002 Rostelecom completed the modernization of the line between Moscow and St. Petersburg, which significantly expanded the throughput capacity of this major route. It also completed the construction of the fiber optic line between Russia and Kazakhstan. In the summer 2002, Rostelecom initiated a major upgrade of the Moscow to Novosibirsk and Moscow to Novorossiisk fiber optic lines. At the end of 2002 Rostelecom began construction of the start-up complex to supply the Astrakhan region. In 2002 Rostelecom completed the regional restructuring. As of January 2003, Rostelecom's organization has been streamlined to form seven regional business units and three functional branches, down from 24 in the past. In 2003 Rostelecom began expanding the flexible multiplexer network to over 45 Russian cities. In Septemeber 2010, Rostelecom acquired the 25%+1 share stake in the charter capital of Svyazinvest from COMSTAR-UTS for RUB 26.0 billion. On April 1, 2011, several companies below merged into Rostelecom: Center Telecom (3171), Skylink (1321), Dalsyaz (3181), Sibirtelecom (3180), Uralsinform (3177), Volgatelecom (3174), North-West Telecom (3173), Southern Telecommunications Company (3175), Dagsvyazinform (1225). Before April 2011, Rostelecom's shareholders were - Vnesheconombank -VEB and Deposit Insurance Agency with a joint stake of 40%, Svyazinvest (51%)and Others (9%). As of 2014, according to Rostelecom's website the Russian government owns 48.1% of share capital(via beneficial ownership through FASPM, Russia Direct Investment Fund and Vnesheconombank VEB), while 30.12% of share capital was constituted by free floating shares or were owned by minor shareholders. In March 2012, Russian President Medvedev ordered Svyazinvest (the holding company) to merge with Rostelecom (a national operator) to eliminate the complicated cross-holding structure. Process-wise, 14.0547520661157 ordinary Svyazinvest shares were placed with a nominal value of RUB 1 each, and converted into one Rostelecom ordinary share with a nominal value of RUB 0.0025 each. The merger was completed by end 2013, resulting in Vnesheconombank and the Federal Property Management Agency jointly owning 51% of Rostelecom's shares. Rostelecom is also in the midst of forming a joint venture with Tele2 for the Russian mobile market via a two-stage merger. Rostelecom will spin off its standalone and integrated mobile assets respectively during the two stages. The book value of these assets will total RUB 19.5 billion. The new company will be 55% owned by Tele2 and 45% owned by Rostelecom and will be called T2 RTK Holding. 2011-2008 capacity revised per Rostelecom's AR 2010 Percentage private revised for all years (see filling system) http://www.rt.ru/en/centr-invest/ir/news/ Capex figures removed because of revision of% private. Investment figures for 2011-2013 were revised according to Rostelecom's newest figures following the merger of Svyazinvest and other related companies. Hence there is an increase in capacity and CAPEX investment. For follow-up: to check if private investment % in CAPEX and new sponsors should be included in the database.