SVYAZINVEST: INVESTMENT PRIORITIES AND POSSIBILITIES INTERNATIONAL COOPERATION

Transcription

1 SVYAZINVEST: INVESTMENT PRIORITIES AND POSSIBILITIES INTERNATIONAL COOPERATION

2 SVYAZINVEST: STRUCTURE AND COVERAGE North-West Telecom 4.4 mln lines in service Market cap equals $94 mln Uralsvyazinform 7.5 mln lines in services Market cap stands at $,49 mln State 75% - 1 share Mustcom LTD 5% + 1 share CenterTelecom 6.6 mln lines in service Market cap is $1,44 mln Svyazinvest Rostelecom 7 telcos MGTS Other Controlling interest Blocking interest Volga Telecom 4.9 mln lines in service Market cap is $1,771 mln South Telecom Company 4 mln lines in service Market cap is $6 mln Sibirtelecom 4.4 mln lines in service Market cap is $6 mln Dalsvyaz 1.4 mln lines in service Market cap totals $499 mln _Foundation of Svyazinvest September 18, 1995 _Sale of the company s shares to Mustcom July 1997 _Corporate integration: 7 telecom entities were consolidated into 7 concerns throughout - _Rostelecom owns a powerful backbone network spreading all across Russia. The company s network is around, km long and the company s market capitalization is $6,4 mln. _At present, the estimated capitalization of Svyazinvest is some $8 bln.

3 KEY ECONOMIC INDICATORS STABLE GROWTH REVENUE AND OPERATING EXPENSES *, USD bln OPERATING INCOME, USD bln Revenue Expenses 1, EBITDA, USD bln NET PROFIT, USD mln 3, , ,,5, * data exclude JSC MGTS and JSC KGTS

4 TRENDS ON THE TELECOMMUNICATIONS MARKET Trends in GDP per capita and telecom expenses,7,5, 1,9 3,5 4,5 4 3,5 3 Foreign investments in the industry, $ bln 3 5 Earnings of Russian telecom industry, $ bln 4, ,1 1, 1, (a) GDP per capita, $ th Telecom expenses, %,5 1, Earnings of Russian telecom industry Earnings of Svyazinvest Group Trends in fixed-line and mobile customer bases Fixed-line penetration depending on macroeconomic environment 18, 16, 14, 1, 1, 8, 6, 4,,, (a) Wireless subscribers, mln Lines in service operated by Svyazinvest Group's telecom providers, mln 4

5 BALANCED INVESTMENT POLICY STRUCTURE OF 4 INVESTMENTS, USD mln CAPEX, USD bln 45 (3%) 3 (1%) (1%) 1 4 (53%) STRUCTURE OF 5 INVESTMENTS, USD mln (4%) 199 (13%) 599 (4%) (3%) STRUCTURE OF 6 INVESTMENTS, USD mln Traditional telephony Development of infrastructure 16 (11%) 39 (8%) VAS and IT technologies Other (9%) 448 (3%)

6 STRENGTHENING MARKET POSITIONS IN VAS SEGMENT 6 DYNAMICS OF INVESTMENTS IN VAS AND IT TECHNOLOGIES, USD mln VAS REVENUE IN TOTAL REVENUE OF SVYAZINVEST GROUP, USD mln 1.% 15% 1% % % % % 6% 3% % + 48 % _According to our estimates, VAS earnings are projected to surge 48% in 6. VAS REVENUE BREAKDOWN AT SERVICES (ESTIMATE) 6 19% 6% 6% 4% % 1% Internet Data transmission Cable TV Intelligent networks IP telephony услуги ЦОВ Wi-Fi & Wi-Max 6% 1 VAS revenue VAS revenue in Group`s total revenue SHARE OF INTERNET TRAFFIC VIA xdsl CHANNELS IN TOTAL INFORMATION TRANSMITTED BY INTERNET NETWORK, % % % 3% 4% by dedicated xdsl channels Internet traffic based on other technologies

7 COMPANIES OF SVYAZINVEST GROUP UNDER NEW REGULATION CONDITIONS New conditions and challenges: _Liberalization of the LD market _New interconnect regulations (incl. tariff regulation) _CPP introduction Major risks and threats: _Loss in market share _Decline in telecom tariffs _Subscribers switching from fixed-line operators OPERATORS SHOW COMPETITIVE EDGE IN NEW CONDITIONS RTOs revenue from traffic merger and transmission, Rb bln RTOs traffic transmission services, th min Additional opportunities from introduction of CPP: 4,5 4, 3,5 3, _RTOs incremental revenue from zonal services, July 1 December 31, 6 ESTIMATE: $19 mln,5 3 7, 1,,5, 1 кв 6 кв 6 3 кв 6 4 кв 6 Доходы от услуг по пропуску трафика, оказанных ОАО "Ростелеком" Доходы от услуг по пропуску трафика, оказанных другим операторам 1 1 кв 6 кв 6 3 кв 6 4 кв 6 Трафик, по услугам по пропуску трафика, оказанным ОАО "Ростелеком", т.мин. Трафик, по услугам по пропуску трафика, оказанным другим операторам, т.мин. _RTOs incremental financials, July 1 December 31, 6 ESTIMATE: $ 8 mln

8 TRANSPARENT CONDIITONS OF OPERATIONS ON THE TELECOM MARKET: RELATIONS IN EQUIPMENT SUPPLIES TVT compliance GATS compliance INTEGRITY AND STABILITY of operations carried out via Svyazinvest Group s networks Cooperation with Japanese equipment suppliers Suppliers Sumitomo NEC Corporation FUJITSU _Switching equipment _Transmission systems _DWDM _Radio relay equipment Operators Rostelecom Center Telecom Volga Telecom Uralsvyazinform NWT Siberia Telecom STC Far East Telecom 8

9 TRANSIT BETWEEN EUROPE AND ASIA THE SHORTEST AND MOST RELIABLE TRANSCONTINENTAL ROUTE Europe ITUR DWDM Microwave (SDH) Sea Cables TE A Russia China Korea Japan R-J-K _Rostelecom offers high-speed connections to Europe with points of presence in London, Stockholm and Frankfurt. _In 4 Rostelecom completed the upgrade of its backbone network Moscow-Khabarovsk and Moscow- Novorossiysk. _ The operator paved the way for transiting heavy traffic between Europe and Asia using Rostelecom s network Transit between Europe and Asia (ТЕА). _Traffic exchange with KDDI and Japan Telecom was organized through FFOTL Russia-Japan-Korea (RJK). 9

10 RUSSIAN-JAPANESE CABLE SYSTEM - A STRATEGIC AREA FOR ROSTELECOM _Building an optic underwater cable system on the route Nakhodka-Наоetsu (Japan). _In 6, a trilateral agreement was signed between Rostelecom, KDDI and NEC Corporation _The total length of underwater cable is 1,8 km (9km x routes). _Transmission capacity is - 64 Gb/sec. _The system is based on DWDM 1 Gb/sec technology. _Commercial service is to be launched in Q18. 1

11 11 Bld., 55 Plyuschikha St., 1111 Moscow Tel.: +7 (495) Fax: + (495) ir@svyazinvest.ru Web-site: