Rostelecom

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OJSC Rostelecom
Type Public (OAO)
Traded as MCXRTKM
OTCQXROSYY
Industry Telecommunications
Headquarters Moscow, Russia
Key people Vadim Semyonov, (Chairman) Sergey Kalugin, (CEO) Shulga Mihail , (engeneer) , Alexey Dolmatov (manager)
Products Fixed Telephony
Mobile Telephony
Broadband Internet
IT Services
Networking Solutions
Cable television
Revenue Increase USD 10.5 billion (2013)[1]
Net income Decrease USD 1.1 billion (2012)
Employees 170,000
Subsidiaries National Cable Networks, Central Telegraph, Giprosvyaz, Onlime, RT-Mobile
Website www.rostelecom.ru

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%. The company provides traditional fixed-line voice, mobile, data, TV and value-added services to residential, corporate and governmental subscribers. Rostelecom has the largest domestic backbone network and last-mile connections to approximately 43 million households in Russia. The company is present on almost the entire territory of the Russian Federation. In 2011 the company had approximately 500,000 km backbone capacity (the nearest rival MTS has 117,000 km backbone), as well as 28.1 mln out of Russia’s total 41.4 mln copper lastmile lines, which makes it the largest provider of traditional fixed-line voice services and broadband Internet in the country.[2]

The company's stock is traded on the Moscow Exchange, OTCBB, London Stock Exchange and Frankfurt Stock Exchange.

History[edit]

The company's headquarters in Moscow

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.

Rostelecom was founded on September 23, 1993, when the state registration approved the company. In 1995-1996 the construction of the Central Complex, the unified international and long distance digital communication networks in the country's single telecommunications environment. Rostelecom built the world's longest digital radio link "Moscow - Khabarovsk". From 1998 to 2000, the Group entered into the program to ensure a modern digital communication remote and inaccessible regions of Russia. Were commissioned ground station satellite networks of OJSC "Rostelecom" using frequency satellite resources of the new generation LMI-1 of the International Organization of Space Communications "Intersputnik".

The logo used until 2011

In 2004, Rostelecom completed the modernization of the main legs of its Moscow�Khabarovsk and Moscow� Novorossiysk backbone network, increasing its bandwidth capacity four�fold. The total length of the upgraded lines was 15,300 km.[3]

On October 18, 2006 "Rostelecom" received a certificate of quality of IP-MPLS network and became the ISP backbone. In December 2006, Rostelecom and the telecommunications company KDDI in Japan under the "Transit Europe - Asia" signed an agreement to build a line of Nakhodka - Naoetsu with total bandwidth of 640 Gbit/s instead of the previous 560 Mbit/s.[4]

On March 2012 Russian President Dmitry Medvedev ordered a merger between Svyazinvest and Rostelecom within a year. The order, published at pravo.gov.ru state legal website, also stipulated that the Russian government and the country's national development bank Vnesheconombank (VEB) will maintain a holding of over 50 percent to keep control of the new company, which will work under the Rostelecom brand name.[5] In late September 2013 Rostelecom completed the final stage of its reorganization, under which state-run telecom holding Svyazinvest and 20 other firms were integrated into Rostelecom. The government’s combined common stake in the merged company amounted to 51.12% after the reorganization.[6]

On September 2013 it was announced that the company had deployed one of the world’s largest operator content delivery networks. The network sees the deployment of content servers in 30 major Russian cities by Swedish infrastructure vendor Ericsson, which said that the platform will enable Rostelecom to create sustainable businesses in partnership with over the top (OTT) service providers.[7]

On October 2013 Rostelecom has announced that Svyazinvest, alongside 20 other joint-stock companies, which are either directly or indirectly controlled by Rostelecom and/or Svyazinvest, had now been excluded from the Unified State Register of Legal Entities following their official mergers with Rostelecom. This development brought to an end all activities carried out by Svyazinvest, and Rostelecom had now assumed all rights and responsibilities for the merged companies in accordance with the transfer deeds.[8]

On October 2013 the company completed development and began commercial operations of its single payment system. It simplifies the procedure for payment for all telecommunications services of the company on the territory of Russia and also introduce new services such as "auto-top-up" and "e-commerce" or "single click".[9] On December 2013 the company launched its new Automatic Payment service on its customer service portal. The service enables customers to set automatic payments for fixed telephony, broadband internet, IPTV and mobile services from the operator, with the amounts deducted from a bank card. The service is free for subscribers across the country.[10]

On February 2014 Russian integrator Tekhnoserv has finished to create a unified information system on sales and customer service for Rostelecom. It enables Rostelecom to gather, store and access the information necessary to carry out sales and customer service processes. The system facilitates access to the information by staff. it has been introduced at call centres in eight macro-regional branches of Rostelecom. The system contains 150GB of corporate information.[11]

On March 2014 the company announced that it had completed the installation of digital telephone exchanges in all regional centers of the Astrakhan Oblast.[12]

On May 2014 following the Annexation of Crimea to Russia the company completed laying an underwater communication line across the Kerch Strait, which will connect Republic of Crimea and federal city of Sevastopol with Russian regions and bypass Ukraine. It includes a 40-kilometer fiber-optic cable line from the Krasnodar region to the Kerch Strait, the construction of which began in late March, and a 6-kilometer underwater part.[13] Also, Miranda-media, a subsidiary of Rostelecom, had acquired assets in the Republic of Crimea, including telecommunications equipment and fiber optical networks with a total length exceeding 2,000 kilometers. The acquired infrastructure was earlier owned by three Ukrainian companies. The purchase of already built infrastructure permits the company to save time for building a full-scale network to begin services to subscribers on the peninsula.[14]

Corporate governance[edit]

The company’s board of directors consists of eleven members. Three of them represent governmental entities. The Russian government is represented by the Federal Property Management Agency, together with Vnesheconombank, owns more than 51% of the company’s ordinary shares.

Operations[edit]

Rostelecom includes the regional incumbent telecommunications operators (CentreTelecom, SibirTelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, North-West Telecom and Southern Telecommunications Company) and Dagsvyazinform. Along with its traditional telephony services, Rostelecom provides high-tech telecommunications services, including intelligent network services (INS), video conferencing, broadband Internet access and deployment of virtual private networks (VPN) among others.

Rostelecom has the largest domestic backbone network (approximately 600 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.[15]

Rostelecom is set to offer triple-play services, combining phone, TV and Internet, in the second half of 2014.[16] On May 2014 the company has completed the introduction of a single business management system on the basis of the Oracle E-Business Suite R12 at all its macro-regional branches, a project which was lunached in 2011. AT Consulting has acted as the partner for introducing the system. The system will support key business processes at Rostelecom: network planning, designing and optimisation, activation of services and other functions. The new system has been integrated with Fault Management systems.[17][18]

Land network[edit]

The company owns and operates the country’s most extensive nationwide fiber-optic backbone network, about 160,000 km in lengths. By cable the network is connected to countries in Europe and East Asia. Rostelecom has direct international access to over 100 operators from 72 countries and 30 international cable networks and teams up with over 400 international operators and companies. Being Russia's leading operator, Rostelecom is a permanent member of the ITU and of the Board of Regional Operators' Community.[19]

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.

In 2010 Rostelecom has commissioned a new fiber-optic line St. PetersburgVologdaArchangelsk stretching over 1 thousand km at 24 Gbit/s.[20] At the end of 2013 Rostelecom completed to deploy the Tynda - Yakutsk fiber line which according to the company provides network redundancy, optimizing traffic and increase trunk in areas Tynda - Skovorodino - Khabarovsk.[21] The 1,056-km, 80 Gbit/s link is based on DWDM technology. Its capacity can be expanded to 3.2 Tbit/s in future. The new backbone increased the capacity of telecommunications links in Yakutsk, Aldan and Neryungri, as well as Nizhny-Bestyakh, Kachikatsy, Nizhny-Kuranakh, Bolshoy-Khatymi and Yengra.[22] On October 2013 the company announced they initiated the deployment of the Infinera DTN-X platform based on 500 Gigabit per second (Gb/s) coherent super-channel technology to extend the reach of Rostelecom's transport IP/MPLS network. The Infinera Intelligent Transport Network, featuring the DTN-X with photonic integrated circuit (PIC) technology, also allows Rostelecom to reduce operating costs by offering network automation capabilities, multi-layer convergence and high reliability.[23]

Rostelecom had 29.2 million local fixed-line voice subscribers, 12.4 million mobile voice subscribers, 7.4 million fixed-line broadband subscribers and 6 million pay-TV subscribers at 2012 through its subsidiary National Cable Networks.

Television[edit]

With its 6 million subscribers in 2012, Rostelecom is the second-largest pay-TV player in Russia after National Satellite Company (satellite TV operator, Tricolor-TV brand). Rostelecom has 22% market share by subscribers versus 29% with NSC. As of 2012, 85% of Rostelecom's pay-TV subscribers were users of cable TV and the remaining 15% used IPTV. The company is largely present in the cable segment through its 100% subsidiary National Telecommunications (NTK), which was acquired in 2011. Rostelecom provides IPTV services in regions on the base of IP infrastructure of former regional telecoms. In 2011 the company launched the Zabava.ru multimedia portal.[24]

On October 2013 Rostelecom has announced the results of its latest tender for set-top boxes. The requirement was for two types of boxes: "Interactive TV Standard" and "Interactive TV Standard Plus". Smartlabs, Inc. will provide 47,000 Standard Plus STBs, with the remaining 609,000 Standard boxes being provided by Smartlabs (304,500), Promzakaz (182,700) and Promsvyaz (121,800).[25]

On March 2013 it was announced that total pay-TV subscriber base increased 12% year-on-year to 6.6 million subscribers. Out of the total subscriber base, the number of interactive TV subscribers more than doubled to 1.4 million, with the penetration of optical networks reaching 34%. Rostelecom's share of the Interactive TV market was 49% at this period.[26] The company is working with content providers to offer exclusive high-quality content to attract users. In 2013 it already agreed to provide programming from Stockholm-based Modern Times Group AB (MTGB)’s Viasat and local Gazprom-Media.

Cellular network[edit]

Rostelecom and its subsidiaries NSS, Baikalvestkom, Yeniseikom, SkyLink, Volgograd GSM and Akos provide 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.[27] On April 2013 the company announced the launch of 3G+ networks in the Sverdlovsk, Kurgan and Chelyabinsk regions, in the south of the Tyumen region 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.[28] 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.[29]

On 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%.[30] 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.[31] 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".[32] 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 will pass seven cellular subsidiaries it owns: "Sky Link", "Nizhny Novgorod Cellular Communications", "Baikalwestcom", " Volgograd GSM" Yenisei Telecom" and ICCO.[33]

On February 2014 it was reported that new holding company had published a tender for the supply of equipment for networks in 42 Russian regions. This will allow the new company to use the available frequencies for the construction of fourth-generation networks.[34]

On March 2014 it was announced that the first part of the deal was completed when Rostelecom had contributed the shares of its mobile subsidiaries to the joint venture, including Sky Link, as well as the assets of its start-up regions which include Moscow and St. Petersburg among other regions. Debt obligations amounting to RUB 37 billion were simultaneously transferred to the new joint venture.[35]

Satellite network[edit]

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.

The united satellite communications network of Rostelecom is based on two technologies:

  • Rostelecom’s own and leased circuits employing the space segment of the C-and Ku- frequency bands. Rostelecom owned channels are provisioned using leased capacity with the use of 163 earth stations. The leased circuits are purchased on a turnkey basis from such operators as Russian Satellite Communications Company, Zond Holding, Satis-TL-94, Svyazkontaktinform, and Yamaltelekom.
  • Rostelecom’s own and leased VSAT-networks with shared access use the space segment of the Ku-frequency

band. Rostelecom owned VSAT-networks are provisioned on the basis of leased capacity with the use of central VSAT-stations located in Center, Siberia, Ural, Far East regional branches of Rostelecom. Leased VSAT-networks (or individual channels) are purchased as a general redistributed pool resource from such providers as RTComm.RU, Stek.kom, Synterra, Iskra, Russian Satellite Communications Company, Amtel-Svyaz and GTNT.

Retail[edit]

In early 2014 the company owned about 2,500 outlets across Russia. As part of the company strategy, sales services will gradually move from retail stores in the Internet and remote channels. In 2012 the company stetted up a new daughter company, Rostelecom - Retail Systems (Russian: Ростелеком - Розничные системы).[36]

Cloud services[edit]

In 2011 Rostelecom was appointed by the Russian government to implement important parts of the federal program Information Society 2011–2020, including cloud computing in simpler terms. Among seventeen different points, Rostelecom will also develop a unified government services portal, a unified "space of trust for electronic signature", an infrastructure for a universal electronic card, a unified system of classifications and directories for the federal and local governments, as well as new IT solutions for state purchasing.[37]

On March 2012 has launched the construction of a mega data center, located on the premises of the Serp i Molot factory in Moscow. The server rooms will occupy some 10 thousand square meters which twice as much as Sberbank’s existing mega data center in the capital. The data center began operating in 2013 runs the national cloud computing platform ordered by the Russian government. On May 2012 the company has completed phase one of the project, the national cloud computing platform to be fully put together by 2015 as part of the federal Information Society program. The platform, launched in beta version in March of that year under the o7.com domain name, offers cloud-based software, infrastructure and development platform services (SaaS, IaaS and PaaS, respectively).

Karta Svyazi[edit]

Karta Svyazi is a user-friendly prepaid long-distance telephone card service designed to provide telephony and access to the internet for people on the go.

References[edit]

  1. ^ "Выручка "Ростелекома" по итогам 2013 года составит 329 млрд рублей — глава Минкомсвязи". TASS-TELECOM. 15 January 2014. Retrieved 23 January 2014. 
  2. ^ Rostelecom: From an outsider to a true Big 4 name, Gazprombank
  3. ^ Svyazinvest- The FIFTH INTERNATIONAL TELECOMMUNICATIONS and INVESTMENT in RUSSIA CONFERENCE. VALERY YASHIN: SVYAZINVEST: KEY DEVELOPMENTS in 2004
  4. ^ Россия-Япония: скорость связи вырастет в 1000 раз // CNews.ru, 13.12.2006
  5. ^ "Medvedev Orders Svyazinvest, Rostelecom Merger", Ria Novosti
  6. ^ "Russian ministry seeking organizers for Rostelecom privatization". Prime business news agency. Retrieved 14 December 2013. 
  7. ^ Russia’s Rostelecom deploys “groundbreaking” CDN
  8. ^ "Rostelecom completes second stage of Svyazinvest reorganisation". Telegrography. Retrieved 27 December 2013. 
  9. ^ Rostelecom implements unified payment system
  10. ^ "Rostelecom launches automatic payment". Telecom Papaer. Retrieved 21 December 2013. 
  11. ^ Tekhnoserv deploys customer service database for Rostelecom
  12. ^ ""Ростелеком" установил цифровые АТС в Астраханской области". comnews.ru. 19 March 2014. Retrieved 20 March 2014. 
  13. ^ "Rostelecom Close to Completing Underwater Cable to Crimea". Moscow Times. 14 April 2014. Retrieved 2 May 2014. 
  14. ^ "Rostelecom acquires Crimean telecommunications infrastructure". ITAR TASS. 8 May 2014. Retrieved 8 May 2014. 
  15. ^ Rostelecom: From an outsider to a true Big 4 name, Gazprombank
  16. ^ "Rostelecom CEO Says Tele2 Russia Deal Will Create Value". Bloomberg. Retrieved 14 December 2013. 
  17. ^ "Rostelecom introduces single ERP system". Telecompaper. 12 May 2014. Retrieved 7 June 2014. 
  18. ^ "Rostelecom launches Oracle network management system". Telecompaper. 3 June 2014. Retrieved 7 June 2014. 
  19. ^ Svyazinvest- The FIFTH INTERNATIONAL TELECOMMUNICATIONS and INVESTMENT in RUSSIA CONFERENCE. VALERY YASHIN: SVYAZINVEST: KEY DEVELOPMENTS in 2004
  20. ^ Rostelecom had a new fiber optic line in Arkhangelsk
  21. ^ ""Ростелеком" достроит магистральный канал Тында-Якутск до конца года". comnews.ru. Retrieved 16 November 2013. 
  22. ^ "Rostelecom launches fibre backbone in Sakha". Telecompapaer. 13 February 2014. Retrieved 14 February 2014. 
  23. ^ "Rostelecom Selects Infinera for Multi-Terabit Intelligent Transport Network™ in Russia". Infinera. 9 October 2013. Retrieved 14 February 2014. 
  24. ^ Rostelecom: From an outsider to a true Big 4 name, Gazprombank
  25. ^ Rostelecom orders 656,000 IPTV set-top boxes
  26. ^ Rostelecom doubles IPTV subscribers in 2012 to 1.4 million
  27. ^ "Дочка "Ростелекома" начала тестирование сети 3G+ в Красноярске". comnews.ru. Retrieved 30 November 2013. 
  28. ^ "Rostelecom launches 3G+ network in five regions of the Urals Federal District". Rostelecom official website. Retrieved 14 December 2013. 
  29. ^ "Rostelecom OJSC: Rostelecom launches the first part of its LTE network in Sochi". Bloomberg. Retrieved 14 December 2013. 
  30. ^ "Rostelecom approves mobile merger with former Tele2 unit". Reuters. 14 December 2013. 
  31. ^ "Rostelecom Board OKs Merging Mobile Assets with Tele2 Russia". The Wall Street Journal. Retrieved 14 December 2013. 
  32. ^ "Rostelecom CEO Says Tele2 Russia Deal Will Create Value". Bloomberg. Retrieved 14 December 2013. 
  33. ^ ""Ростелеком" и "Tele2" расписались". comnews.ru. 7 February 2014. Retrieved 7 February 2014. 
  34. ^ ""Теle2 рус холдинг" объявил масштабный тендер на поставку оборудования". comnews.ru. 14 February 2014. Retrieved 15 February 2014. 
  35. ^ "Rostelecom Completes the First Stage of Establishing a Joint Venture with Tele2 Russia". Business Wire. 28 March 2014. Retrieved 29 March 2014. 
  36. ^ ""Ростелеком" уводит продавцов в Интернет". comnews.ru. Retrieved 3 December 2013. 
  37. ^ "Rostelecom to implement e-signature, e-government and cloud-computing state programs". East West Digital News. Retrieved 21 December 2013. 

External links[edit]