Rostelecom grows earnings on broadband, TV demand

Russian telecoms incumbent Rostelecom has flagged growth in revenues and profits on the back of rising demand for broadband and pay-TV services.

The state-controlled operator reported a 12% increase in net profit for the three months ending September, to RUB10.5 billion ($319 million), and a 2% rise in revenues, to RUB78.2 billion, compared with the same period of 2012.

Russian telecoms incumbent Rostelecom has flagged growth in revenues and profits on the back of rising demand for broadband and pay-TV services.

The state-controlled operator reported a 12% increase in net profit for the three months ending September, to RUB10.5 billion ($319 million), and a 2% rise in revenues, to RUB78.2 billion, compared with the same period of 2012.

“Efforts taken to strengthen our market positions in key segments and improve on our internal efficiency led to positive results during the quarter,” said Sergey Kalugin, Rostelecom’s (Moscow, Russia) president. “Not only do we continue to grow our broadband and pay-TV subscriber base, but we also increased our net income during the quarter.”

“Furthermore, all the necessary corporate procedures associated with the reogranisation of Rostelecom have been successfully executed, with Svyazinvest and a range of subsidiaries now merged with Rostelecom,” added Kalugin.

Rostelecom completed its reorganization on 1 October 2013, merging Svyazinvest and various other companies it controlled either directly or indirectly with OJSC Rostelecom, the operator’s parent company.

The company said its base of broadband customers grew by 10% between September 2012 and September 2013, to about 9.8 million customers, while the number of pay-TV customer it serves rose by the same percentage, to 7 million customers, over the same period.

Rostelecom also reported a 4% increase in the number of mobile customers it serves, to 14.1 million.

Nevertheless, the operator’s revenue growth was largely down to the take-up of broadband services and growth in interconnection and traffic transit services.

Indeed, Rostelecom noted a dip in average revenue per user at its mobile business, blaming this on the “widespread lack of mobile data services”.

That was despite the launch of 3G networks in St Petersburg and Novosibirsk between July and September 2013.

Rostelecom also lauded progress on efficiency measures that have helped to boost the bottom-line performance.

“The focus on operating efficiency, which has seen us optimize relationships with vendors and contractors, is already having a positive effect on our financial performance, with improvements to procurement efficiency enabling savings of over RUB12 billion over the past two reporting quarters,” said Kai-Uwe Mehlhorn, Rostelecom’s chief financial officer.