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+ Rostelecom

PJSC Rostelecom – one of the largest in Russia and Europe of telecommunication companies of national scale which is present at all segments of the market of communication services and covering millions of households in Russia.

As of the end of 2016 the number of subscribers of services broadband access of Rostelecom exceeds 12.2 million, and paid TV of Rostelecom - 9.2 million users from whom over 4.0 million are watched by the federal product "Interactive TV".

Moscow office of Rostelecom telecommunication company. Photo:


Main article: History of Rostelecom

History of one of the major companies in the Russian markets of communication and information technologies is complete of bright fascinating events. Chronology up to now here.


Authorized capital of the company is 7.965 million rubles and is separated into 2,943,258,269 ordinary and 242,831,469 preferred shares with a nominal value of 0.0025 rub.

Securities of Rostelecom are trading at the Russian exchanges RTS and MICEX, and also in the electronic system of the curb trading of OTCQX in the USA.

As the share capital structure of Rostelecom as a result of the transaction on purchase of Tele2, will change 2019
As the share capital structure of Rostelecom as a result of the transaction on purchase of Tele2, will change 2019

As the government manages Rostelecom

In March, 2012 it became known that the Government of the Russian Federation added the list of open joint stock companies concerning which determination of a position of the state as shareholder, on the most important issues of activity of the company it is performed by the prime minister of the country or, on his order, some of Deputy Prime Ministers. The largest Russian telecom operator Rostelecom is entered to this list. Earlier the state directly did not participate in company management as it owned a control share in it not independently, and through Svyazinvest, Deposit Insurance Agency (DIA) and Vnesheconombank (VEB). It is obvious that the order about change of an order of management of Rostelecom is caused by change of a shareholding structure of the company and[1].

Who approves candidacies of heads

The Deputy Prime Minister Arkady Dvorkovich supervising the communications industry in an interview to the Vedomosti newspaper, September, 2012[2]

  • So at you with Presidential Administration opinions on the one who and how should manage Rostelecom differ?

  • At us on all industries including on Rostelecom, there is an accurate position. Determination of the one who should be in councils, naturally, in coordination with Presidential Administration — a prerogative of the ministries. The position of the Ministry of Telecom and Mass Communications is defining. Therefore the minister will develop a position, will report to the Prime Minister, we will approve further with Presidential Administration.

  • It turns out, on Rostelecom and Svyazinvest though they are not the strategic enterprises, it is all the same necessary to agree candidacies with Presidential Administration?

  • Yes, the president made such decision, turned on these companies in such list. But practice of approval on a big range of the companies is entered at the presidential term of Dmitry Anatolyevich Medvedev, here to make some claim would be ridiculous.

What instructions the government gives

After entering of Rostelecom into the list of the companies in which positions of the state are defined by the management of the government representatives of the Russian Federation in governing bodies of the operator will receive government instructions in several directions. Among them first of all the questions which are submitted for general shareholder meeting: entering into the agenda of a meeting of points for discussion and vote, promotion of candidates for Board of Directors and other governing bodies.

Besides, the government will give directives to the representatives how to vote concerning the agenda of a meeting and also about the requirement of convocation of extraordinary general shareholder meetings if it is necessary. The state can implement However, not all these positions right now, however it will become possible in the long term.

Because of what the state administration became more direct

The decision of the government on the direct participation in management Rostelecom by the edition of directives to the state representatives is connected with the fact that the Russian Federation became the direct shareholder of the company recently. Before state control over Rostelecom was performed through the Svyazinvest controlled by the state, Deposit Insurance Agency (DIA) and Vnesheconombank (VEB). However in January, 2012 the DIA transferred the stocks of Rostelecom owned by it to the state on behalf of Rosimushchestvo. Therefore the state had an immediate possession by stocks of Rostelecom in the amount of 7.43% of voting shares.

It gives the chance to the state to exercise directive control of activity of the company through the representatives. However yet not on all questions the state will be able to make soy offers and requirements. So, for example, there is no opportunity to convene an extraordinary meeting of shareholders as the packet in the amount of not less than 10% of voting shares which is not in immediate state possession is for this purpose necessary. Therefore if the state wants to submit any questions for an extraordinary meeting, he should agree about the joint requirement of it with VEB and, for example, "subsidiary" of Rostelecom — Mobitel.

Nevertheless already now the state can nominate one representative in Board of Directors of Rostelecom that it also made, having included in the candidate list on election in council on annual meeting of shareholders which will take place in June, the adviser to the Minister of Telecom and Mass Communications Denis Afanasyev. Besides, directives of the government on vote of his representative a packet in 7.43% of voices of shareholders can have significant effect on the result of votes.

That direct control will bring in the long term

Further reorganization of Svyazinvest and Rostelecom on the scheme approved by the interested departments will be performed by accession of Svyazinvest with all its assets. The Russian President Dmitry Medvedev issued on March 24, 2012 the decree on an exception of Svyazinvest of the list of strategic assets that is necessary for implementation of the scheme with its accession to Rostelecom. Besides, the president determined the term of holding these actions ― till March, 2013.

According to the approved scheme, as a result of consolidation after share exchange of Svyazinvest on the stock of Rostelecom Rosimushchestvo and VEB will totally possess more than 50% of its stocks, another 0.5% of shares of joint Rostelecom will be received by its "daughter" Mobitel, minority shareholders will have other voting shares. More than 25% of voting shares of joint Rostelecom will be at disposal directly of the state on behalf of Rosimushchestvo that will allow to use more widely influence in the company, including convocation of an extraordinary meeting of shareholders and promotion in Board of Directors to three people. At coordinated actions with the controlled state by VEB the Russian Federation will have an opportunity to have a decisive impact on the most important issues of activity of Rostelecom and will ensure the majority in Board of Directors of the company.

As the state estimates efficiency of Rostelecom

The Deputy Prime Minister Arkady Dvorkovich supervising the communications industry in an interview to the Vedomosti newspaper, September, 2012[2]

  • Since 2009 there is a reform of Rostelecom, and during this time on it there were many complaints, including from state agencies, for example the Ministry of Economic Development. And how you estimate the undertaken reform and whether something will change in its course?

  • I will not estimate the past. We are engaged in reorganization in the industry and next year we are going it to complete. According to plans it should be made until the end of March, 2013. We do everything to be in time. If corporate procedures lead to the fact that it will be slightly longer, nothing terrible will occur. The state should receive more than 50% in the consolidated company after completion of all procedures. In this sense nothing will change. As for introduction of specific packets, their assessment is the current work. We complete a stage on accession of a number of share blocks now, everything goes normally — routinely. We have questions to the strategy of work of Rostelecom, to the investment program, to those results which we reach at the expense of the resources which are available in the company. There are many good projects in Rostelecom. For example, pilot projects on separate frequency zones which can grow further in more large-scale projects. But in general we consider that Rostelecom is capable of bigger, is capable to become much more effective company, including in terms of an infrastructure component. I mean providing the Internet on the most part of the territory of the country - it is that task which was set. It seems to me, we can move more in high gear, and Rostelecom plays a key role here. As for corporate management, we discuss this subject with Presidential Administration now, I hope that we will develop the joint solution.

  • What now prevents Rostelecom to work as you from it wait?

  • We have questions to efficiency of those investments which are made. At such resources, it seems to us, it would be possible to move quicker.

Board of Directors

Main article: Board of Directors of Rostelecom

Option program

Main article: Option program of Rostelecom

Performance Indicators

Main article: Financial performance of Rostelecom

2019: Growth of revenue by 5%, net profit — for 10%

In 2019 revenue of Rostelecom reached 337.42 billion rubles, having increased by 5% in comparison with previous year earlier that was promoted in many respects by rendering digital services.

Annual incomes from services of broadband access (broadband access) in the Internet increased to 83.87 billion rubles from 80.04 billion rubles the previous year. Services of television brought to Rostelecom 37.13 billion rubles, having exceeded result of year prescription in 34.46 billion rubles.

Financial performance of Rostelecom
Financial performance of Rostelecom

In 2019 the operator earned 61.74 billion rubles from the market of the fixed telephony. In the 2018th revenue was higher and was measured by 69.99 billion rubles. On cloud and  VAS services the company gained 49.8 billion rubles whereas in 2018 this income equaled 36.9 billion rubles.

The number of subscribers of the operator increased practically by all sectors. Growth of number of Internet users was 2% (13.2 million by the end of 2019), users of services of a pay TV — for 3% (from them the number of subscribers of Interactive TV grew by 6% up to 5.6 million), subscribers of the virtual operator — 41% (up to 1.7 million). At the same time the number of subscribers of local telephone communication continues to be reduced: it dropped by 10% and by the end of 2019 made 15.7 million. 

Average revenue from one subscriber of services of broadband access Internet reached 402 rubles, having increased by 2%. In a segment of paid TV there was a growth by 2% up to 255 rubles.

Rostelecom completed 2019 with net profit in the amount of 16.47 billion rubles that for 10% exceeds the profit of year prescription. Net profit was 4.9% of revenue against 4.7% in 2018.

Good results of 2019 became possible thanks to efforts of all blocks of client segments to ways of digital transformation and promotion of modern digital services. At the same time the segment of corporate and state clients on which sustainable development we stake showed the best two-digit growth — 13% year-on-year — the senior vice president of Rostelecom Vladimir Kiriyenko noted.[3]

Communication networks

Participation in clearing of frequencies for a 5G

"Big Four" of the Russian mobile operators will be engaged in clearing of frequencies for development of networks of fifth generation (5G) in Russia. About it to journalists on the sidelines of East economic forum (the WEF; On September 4-6, 2019) the president of Rostelecom Mikhail Oseevsky reported. Read more here.

5G networks

Main article: a 5G in Tele2 and Rostelecom

2018: The strategy of Rostelecom assumes transition to platform model

Rostelecom intends to pass to a platform business model, similar which implement such companies as Apple, Amazon, Google, Alibaba or Russian VKontakte. Such plan corresponds to the new strategy of the operator, RBC with reference to the sources close to[4] writes [5].

It is supposed that platforms will provide interaction with different clients and partners using API (application programming interface is the application programming interface). For example, by application development for VKontakte - for example, games or different services - developers just use API. In a case with Rostelecom platforms for the smart home, the industrial Internet, telemedicine, etc. can be created.

Besides, strategy, as well as it was announced earlier, assumes transformation of the company in provider of digital services. Among the directions in which Rostelecom intends to develop IT integration, "the smart cities", information security, games, Internet of Things, DPC, cloud services, paid TV are specified.

The operator also indicated the need expansions of a backbone network because of the universal growth of Internet traffic and development of capacious technologies, such as stream video. By 2022 the average speed of the Internet in a segment of B2C should grow by 30-40% - up to 18 Mbps. Due to conversions Rostelecom expects that the ratio of capital costs to revenue can grow a little in comparison with 18.2% in 2017, but by 2022 it will decrease to 17%. Revenue is expected at the level of more than 375 billion rubles by then.

Infrastructure in a cloud Rostelecom, 2017
Infrastructure in a cloud Rostelecom, 2017

2016: Rostelecom will select up to 300 billion rubles for updating of network infrastructure

From 2016 to 2021 Rostelecom is going to allocate up to 300 billion rubles of own funds for implementation of the plan for updating of network infrastructure which provides implementation program - the defined networks (SDN) and technology of virtualization of network functions (NFV). It is written by Kommersant with reference to the president operator Sergey Kalugin[6].

According to him, financing of updating of network infrastructure can happen including due to sale of 16.24% of treasury shares of Rostelecom. "But still for this purpose not the most suitable market situation", - the representative of operator Valery Kostarev specified. It is noted that as of July 29 in trading time at the Moscow Exchange this share block cost 38.23 billion rubles.

Rostelecom annually invests more than 50 billion rubles on different projects therefore the amount with a limit of 300 billion within five years seems quite logical, analysts note. Meanwhile, as the partner of Deloitte Anton Shulga assumed, implementation of NFV and SDN technologies will take place within the general program of upgrade and development of network. The operator spent from 60 to 90 billion rubles for it the last years.

In the presentation of the operator it appears that updating of infrastructure of network and, in particular, implementation of NFV and SDN, will help to reduce time of an output of new service for the market from 14 to 3 months and also will promote reduction of number of command centers of network from 67 to 7 and to reduction of the personnel servicing network - from 80 thousand people to 50 thousand.

Meanwhile, Rostelecom expects to unroll in the fall of 2016 at least two pilot zones on the implementing solutions SDN and to involve in testing the Russian companies, including the Center of application studies of computer networks, and, perhaps, affiliated to Rostelecom of Programmable Networks LLC (Brain4Net brand).

2013: To efficiency of billing through patches

Rostelecom plans data of number of separate billing systems to two-three platforms OSS/BSS during 2013, reported Sergey Kalugin, the CEO of the company, at annual general shareholder meeting JSC Rostelecom on June 17, 2013.

"At the moment in the company more than 100 different billing systems are implemented that strongly reduces efficiency of many business processes, - Sergey Kalugin emphasized. - Among our major tasks for the current year - to put this situation in order, following the strategy of optimization of the company".

According to the head of the company to bring billing of regions together it will not turn out, but to two-three platforms - after all it is possible.

"It, most likely, will be couple of vendors from that, whose systems OSS/BSS are already implemented locally, - noted Kalugin. - Slowly we will migrate on these "ideal" solutions for now to put certain "patches" on what is".

Platforms should be selected in the nearest future, migration will be begun in October, 2013.

As of August, 2012 in macroregional branches of Rostelecom billing systems of five vendors from which three dominate worked: "Start2kom", "Petter Service" and CBOSS.

  • "Start" - development by "Start2kom", provides settlement service of subscribers in macroregions Center, Siberia, Volga and Far East.

  • the region South is serviced by two systems: "Rate" and Onim of production of Stek-soft Ltd.

Joint venture, absorption and sale of the companies

The contractor of projects according to the Safe City program

In projects on implementation of "The safe city" it is possible to judge practice of work of the operator from the example stated in article of the Practician extinguishes: as Rostelecom lobbied, prepared and won the huge tender

The contractor in the Information Society program

Main article: The chronicle of relationship of the Ministry of Telecom and Mass Communications and Rostelecom on the Electronic Government project

In 2009 the prime minister Vladimir Putin signed the order determining Rostelecom by the only contractor, concerning creation of "the electronic government" within the FTP Electronic Russia.

March 21, 2011. The Government of the Russian Federation determined JSC Rostelecom by the only contractor of a number of actions of the state program "Information society/2011-2020 of /".

August 30, 2011. The Prosecutor General's Office announced identification of embezzlement of budget funds, selected for implementation of the federal target program "Electronic Russia (2002-2010)".

Materials of the inspection which is carried out by the State Office of Public Prosecutor were directed to Investigative department of the Ministry of Internal Affairs.

"The Ministry of Telecom and Mass Communications of the Russian Federation signed with JSC Rostelecom public contracts worth more than 2 billion rubles on execution of works within the FTP "Electronic Russia (2002 - 2010), - it was said in the statement of the State Office of Public Prosecutor. - During the inspection which is carried out by the Prosecutor General's Office in the Ministry of Telecom and Mass Communications of the Russian Federation and JSC Rostelecom the data testimonial of plunder of a part of these means by deception or confidence abuse were obtained".

On March 2, 2012 it became known that the Government determined Rostelecom by the only contractor by creation and development of e-government systems again. This time – for 2012-2014. The order about it was signed by the Prime Minister Vladimir Putin.

The list of actions of the program of state informatization on which Rostelecom acts as the only contractor

2010. 2012.
1.  Ensuring providing public services in electronic form using the Internet (in the part assigned to the Ministry of Telecom and Mass Communications of the Russian Federation). 1.  Development of the federal state information system "Uniform Portal of the Public and Municipal Services (Functions)".
2. Создание инфраструктуры общественного доступа к информации о деятельности органов the government and local government authorities and to their services provided using the Internet. 2.  Development of the mechanisms allowing to use mobile devices for access to services of the electronic government.
3.  Development of the centers of telephone service of citizens and organizations. 3.  Development of services of interaction of citizens and legal entities with public authorities by means of e-mail created based on the federal state information system "Uniform Portal of the Public and Municipal Services (Functions)".
4.  Ensuring access to public services using the universal electronic card. 4.  Formation of common trusted area of the electronic signature.
5.  Ensuring openness of information on activity of public authorities and local government authorities and availability of the state information resources to citizens and the organizations (in the part assigned to the Ministry of Telecom and Mass Communications of the Russian Federation). 5.  Development of a system of interdepartmental electronic interaction.
6.  Creation of the official site of the Russian Federation on the Internet for posting information on placing orders for the supply of goods, works and services for federal needs, needs of territorial subjects of the Russian Federation and municipal needs (in the part assigned to the Ministry of Telecom and Mass Communications of the Russian Federation). 6.  Creation of a single system of the reference books and qualifiers used in the state and municipal information systems.
7.  Development of the uniform vertically integrated automated information system of ensuring monitoring of effectiveness of activity of federal public authorities, public authorities of territorial subjects of the Russian Federation and local government authorities in achievement of key indicators by them in the field of social and economic development of the Russian Federation, development of the industry, implementation of priority national projects and state programs (the uniform vertically integrated state automated information system Management). 7.  Creation of a single system of accounting of civil registrations (electronic registry office).
8.  Ensuring interaction of information systems and resources of public authorities for the purpose of provision of services in electronic form and solving of tasks of public administration using the environment of interdepartmental electronic interaction. 8.  Implementation of an action "Electronic region".
9.  Integration of the state information systems using infrastructure of the electronic government (in the part assigned to the Ministry of Telecom and Mass Communications of the Russian Federation). 9.  Creation and development of the state information system of accounting of the information systems developed and purchased at the expense of means of budgets of a budget system of the Russian Federation.
10.  Creation of a system of identification and an authorized access to the electronic government. 10.  Implementation of coordination of expenditure of funds of public authorities for use of information technologies.
11.  The analysis of information processes of interdepartmental interaction and also preparation of the engineering design on creation and operation in the territory of the Russian Federation infrastructures of the electronic government. 11.  Creation of the national platform for the distributed data processing in which computer resources and capacities are provided to the user as Internet service.
12.  Creation of a management system for implementation of the Program, departmental and regional informatization (in the part assigned to the Ministry of Telecom and Mass Communications of the Russian Federation). 12.  Development of means of information search in different types of content.

Source: orders of the Government of the Russian Federation

Among the listed works is not present such which would not be mentioned in the Information Society state program earlier or were not called profile officials. Updating of the list, most likely, can be treated as the statement for the main priorities in the state informatization for the next 3 years.

As for the state search system, still assure of the press service of Rostelecom that creations of the state analog of the existing search engines do not conduct. Earlier in CNews operator said that officials will be users of his specialized development, and in addition to search only in state data its difference from normal search engines will consist in issue of records of the databases relating to a state segment[7].

In July, 2016 the Accounts Chamber stated what the Ministry of Telecom and Mass Communications overstated the cost of services of Rostelecom in the electronic government, having provided the companies additional regulation of profitability of 10%. Besides, did not provide to the Ministry of Telecom and Mass Communications transfer to Federal Treasury stored at Rostelecom of the equipment worth 316 million rub[8].

Besides, the Accounts Chamber established that in 2015-2016 the Ministry of Telecom and Mass Communications overstated the cost of works of Rostelecom. To calculation of cost of services in operation of the Ministry of Telecom and Mass Communications it was applied including a tariff method. The cost of services calculated by such method in 2015 was 963.4 million rub, and in 2016 is predicted in the amount of 1.22 billion rubles.