Rostelecom

OJSC Rostelecom
Public (OAO)
Traded as MCX: RTKM
OTCQX: ROSYY
Industry Telecommunications
Headquarters Moscow, Russia
Key people
 Sergey Kalugin (President)
Sergei Ivanov
(Chairman of the Board of Directors)
Products Fixed Telephony
Mobile Telephony
Broadband Internet
IT Services
Networking Solutions
Cable television
Revenue Increase USD 10.5 billion (2013)[1]
Decrease USD 1.1 billion (2012)
Number of employees
 170,000
Subsidiaries National Cable Networks, Central Telegraph, Giprosvyaz, Onlime, RT-Mobile, Sputnik.ru
Website www.rostelecom.ru (corporate website)

Rostelecom (Russian: ОАО «Ростелеком») is Russia's leading long-distance telephony provider. Domestic long distance service provides about 50% of the company's revenue; and international long distance calls provide about 25%. From the company's website's "Rostelecom Today" page: "In every region of Russia, Rostelecom acts as a “carriers’ carrier” - interconnecting all local public operators’ networks into a single national network for long-distance service." In other words, if one makes a long distance call or originates Internet contact to or from Russia, it is likely that Rostelecom is providing part of the service. The company's stock is traded on the MICEX, RTS, OTCBB, London Stock Exchange and Frankfurt Stock Exchange.

History

Prior to 1990, responsibility for the provision of telecommunications services lie at the Ministry of Communications of the USSR. On June 26, 1990, the Ministry of Communications of the USSR established a state-owned joint-stock company Sovtelekom, which was given the rights to operate the telecommunications network of the USSR. On December 30, 1992, by order of the State Property Committee of Russia, a state-owned enterprise Rostelecom, which consisted of 20 state long-distance and international calls, as well as communication equipment Intertelekom was organized.

Throughout the '90s, the company which was part of Svyazinvest, was the sole long-distance operator in Russia. Alongside it, local companies operated in the different regions of Russia under the umbrella of Svyazinvest while Rostelecom connected between their networks. In 2001, these companies were merged to form a number of regional incumbent telecommunications operators: CentreTelecom, SibirTelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, North-West Telecom, Southern Telecommunications Company and Dagsvyazinform. On 2011, Svyazinvest was liquidated with the regional subsidiaries merged into Rostelecom.

Operations

Rostelecom has the largest domestic backbone network (approximately 500 thousand km) and last mile connections to approximately 35 million households in Russia. The Company holds licences to provide a wide range of telecommunications services (telephony, data, TV and value-added solutions) to residential, corporate and governmental subscribers and third party operators across all regions of the Russian Federation. The company offers "Karta Svyazi" a user-friendly prepaid long-distance telephone card service designed to provide telephony and access to the internet for people on the go.

Land network

The company's network is based on extant Russian fiber-optic cable lines - FOCL. By cable the network is connected to countries in Europe and East Asia.

Fiber-optic cable lines crosses Russian Federation on directions «Moscow — Novorossiysk», «Moscow — Khabarovsk» and «Moscow — Saint Petersburg».

IP transit has been allocated to a separate company, RTComm, using Rostelecom's STM-16 FOCL resources, but Rostelecom is building its own STM-64 (9,9533 Gbit/s) network, which as of August 2006, covered Rostov-on-Don, Krasnodar, Volgograd, Stavropol, and planned to cover the whole of Russia by the end of 2006.

Rostelecom had 29.2 million local fixed-line voice subscribers, 12.4 million mobile voice subscribers, 7.4 million fixed-line broadband subscribers and 5.5 million pay-TV subscribers at the end of the first quarter of 2010.

Satellite network

Using the services of the Russian Orbital Group, Rostelecom has built its satellite system for its Eastern region, comprising 11 land stations in Siberia and the Russian Far East. Satellite service for the Western region is being built at this time.

Cellular network

Throughout the 90s Rostelecom created subsidiaries that operated cellular networks in different regions of the country, including NSS, Baikalvestkom, Yeniseikom, SkyLink, Volgograd GSM and Akos which provided mobile services on the territory of 59 regions of Russia, serving more than 13.5 million subscribers. During the 2010s, Rostelecom and its subsidiaries built mobile networks of the third generation in 27 regions of Russia. Total planned to install more than 8 thousand base stations. Suppliers of equipment and solutions for the 3G+ network are Ericsson and Huawei.[2] On April 2013 the company announced the launch of 3G+ networks in the Sverdlovsk, Kurgan and Chelyabinsk regions, in the south of the Tyumen Oblast and in the Yamalo-Nenets Autonomous Area. This launch followed the introduction of 3G+ services in Perm Krai. Rostelecom’s 3G+ network was installed using HSPA+ technology, providing data transfer speeds of up to 21MB/s, with the possibility of upgrading the network to reach speeds of up to 42MB/s if demand requires. The 3G+ network is LTE-ready, so that only minor modifications will be required before the Company can roll out its 4G (LTE) network in the future.[3] On June 2013 Rostelecom launched its first part of its LTE network in Sochi for the 2014 Winter Olympics. Besides, the company launched LTE networks in 8 other regions besides Karsnodar Krai by the end of 2013, including Khanty-Mansi Autonomous Okrug, Republic of Khakassia, Republic of North Ossetia–Alania, Sakhalin Oblast, Chukotka Autonomous Okrug, Nenets Autonomous Okrug and the Jewish Autonomous Oblast.[4]

In December 2013, Rostelecom board approved a plan to merge its mobile business into Tele2 Russia, former division of Nordic telecoms group Tele2 which sold it in April 2013 to VTB Bank due to the lack of 3G and 4G data licences, limiting its future growth prospects. Rostelecom would get a 45% voting stake in the new company, T2 RTK Holding, in exchange for contributing its standalone mobile subsidiaries and assets, including SkyLink. Tele2 Russia, owned by state-controlled bank VTB and Russian businessmen Yuri Kovalchuk and Alexei Mordashov, will have 55%. Rostelecom and Tele2 Russia together have around 38 million mobile subscribers, or a combined market share of 16%.[5] During the second stage, Rostelecom will spin off its integrated mobile businesses into its new wholly owned subsidiary, RT-Mobile (Russian: РТ-Мобайл), which will be expected to have Rostelecom's mobile licences, including the LTE licences, re-issued to it.[6] Analysts said the deal makes sense as "Rostelecom has been less efficient in rolling out mobile networks. By relying on the Tele2 team in mobile expansion Rostelecom removes risks, while remaining open to an upside".[7] On February 2014 Rostelecom and Tele2 signed a framework agreement on the integration of mobile assets to the authorized capital of the joint venture "T2 Rus Holding". At the first stage of integration, Rostelecom passed seven cellular subsidiaries it owns: "Sky Link", "Nizhny Novgorod Cellular Communications", "Baikalwestcom", " Volgograd GSM" Yenisei Telecom" and ICCO.[8]

References

  1. ↑ "Выручка "Ростелекома" по итогам 2013 года составит 329 млрд рублей — глава Минкомсвязи". TASS-TELECOM. 15 January 2014. Retrieved 23 January 2014.
  2. ↑ "Дочка "Ростелекома" начала тестирование сети 3G+ в Красноярске". comnews.ru. Retrieved 30 November 2013.
  3. ↑ "Rostelecom launches 3G+ network in five regions of the Urals Federal District". Rostelecom official website. Retrieved 14 December 2013.
  4. ↑ "Rostelecom OJSC: Rostelecom launches the first part of its LTE network in Sochi". Bloomberg. Retrieved 14 December 2013.
  5. ↑ "Rostelecom approves mobile merger with former Tele2 unit". Reuters. 14 December 2013.
  6. ↑ "Rostelecom Board OKs Merging Mobile Assets with Tele2 Russia". The Wall Street Journal. Retrieved 14 December 2013.
  7. ↑ "Rostelecom CEO Says Tele2 Russia Deal Will Create Value". Bloomberg. Retrieved 14 December 2013.
  8. ↑ ""Ростелеком" и "Tele2" расписались". comnews.ru. 7 February 2014. Retrieved 7 February 2014.
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