Rostelecom posts RUB 217.5bn revenue in Q1-Q3 2011

Rostelecom, the incumbent Russian fixed-line telecom operator, reported sales revenue of RUB 217.5bn (€5.4bn) in the first nine months of 2011, resulting in growth of 7% year on year. Key drivers of the company’s sales in Q1-Q3 2011 include the provision of internet access, aggressive acquisitions in the pay TV services segment and traffic transit rendering, VPN and datacentre services to telecom operators.

The company also reported capital expenditures of RUB 40.9bn (€1.02bn) in Q1-Q3 of 2011, 17% more than in the first nine months of 2010.

Rostelecom consolidated revenue breakdown (RUB bn), 2008 – Q3 2011
Rostelecom, 2011
200820092010Q1-Q3 2010Q11-Q3 2011
Telephony services 165.9162.0159.9118.7116.6
- including local telephony 76.4 79.6 85.3 63.8 66.1
- intra zone telephony 27.1 25.2 23.7 17.9 16.3
- ILD /DLD 47.0 42.9 37.9 21.1 17.8
- traffic transition services and interconnect 15.4 14.3 13.0 15.9 16.4
Fixed broadband internet service 22.832.739.628.634.7
Pay TV services 0.70.91.10.85.0
Mobile telephony 29.028.332.023.925.1
Line rental services 12.912.211.06.77.1
Data transmission services 12.413.216.912.213.7
Other revenue 15.315.415.212.4 15.3

The number of Rostelecom broadband services subscribers grew by 27% year on year to 7.9 million users. The pay-TV services provided by the company were received by 5.8 million users, whch further resulted in 538% increase in revenues on a yearly basis from this segment. Behind the growth in pay-TV market was an acquisition of NTK in February 2011, which added 4.6 million pay TV customers to its client portfolio.

Also, in the mobile telephony segment the company witnessed an 8% annual growth in terms of subscribers, with 12.8 million subscribers at the end of Q3 2011.

Nevertheless, in the local telephony segment, the company's customer base shrank by 3% year on year to 28.8 million, which brought a revenue decline of 16% from domestic long distance and international long distance (DLD/ILD) services.

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The company’s revenue structure by customer segments remained relatively unchanged year on year in the January-September period of 2011. Residential customers accounted for more than a half of Rostelecom revenue (55.2%) in the first nine months of 2011, while corporate and governmental segments held shares of 23.8% and 10.5%, respectively.

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Currently, Rostelecom is carrying out a large-scale rebranding process, which is to replace the dozens of brands representing the company at the moment and to unify them under a single brand. The rebranding is to be finalised by the end of 2012.