History / acvhievements

2007

October

Companies of the Svyazinvest Group took part in the seventh International exhibition and forum InfoCom-2007 with a holding-wide display booth in the Crocus Expo Exhibition Hall in Moscow.

Rostelecom accepted an official delegation from one of China's largest telecom companies, China TieTong Telecommunications Corporation. The parties discussed the outlook for collaboration.

Along with a number of the largest telecommunications companies in Europe and North America, Rostelecom took part in the International conference Carriers World. As part of this event, a discussion was held on the outlook and global trends on the international market, new business and partnership opportunities among operators were highlighted.

CenterTelecom entered the list of Russia's 200 largest companies by market value according to data released by Expert PA rating agency on the basis of an evaluation of the capitalization of issuers whose shares are traded on the Moscow Inter-Bank Currency Exchange and Russian Trading System.

September

Rostelecom took part in the tenth annual International conference Submarine Networks World 2007. This large and influential forum will host the representatives of companies whose business is connected with the organization and sale of underwater cable systems for transiting traffic between various continents.

Southern Telecommunications Company ended its participation in TeleRoss-Kubanelektrosvyaz and TeleRoss-Volgograd by selling its 50% stakes in the charter capitals of these companies.

The Board of Directors of Volga Telecom adopted a decision to restructure Nizhny Novgorod Cellular Telecommunications (NCC) by merging Tatinkom-T, Saratov-Mobile, Chuvashia Mobile and Penza Mobile to it.

August

Svyazinvest's regional telecom operators managed to complete hooking up educational institutions to the Internet in line with the priority national project "Education" under which 41,878 Russian schools have been connected to the Internet.

Rostelecom was the first telecommunications operator to receive a conformity certificate "For providing Internet access on the basis of a datacom network" pursuant to "Telecom - Quality" a voluntary certification system for telecommunications services, telecom facilities and quality management systems.

North-West Telecom successfully completed a transaction to underwrite a $US100 mln loan. The loan facility was arranged by UniCredit Group, which is represented by International Moscow Bank (IMB) and the Bank of Austria Creditanstalt AG.

July

Rostelecom and leading Chinese operator China Telecom entered into an Internet exchange agreement (peering).

Sibirtelecom began to restructure its organizational structure of the head office. On July 3, 2007 the new top managers were appointed at the company's head office and branches. This shakeup was due to the formation of new business units.

The Board of Directors of North-West Telecom approved the sale of its 15% stake in Telecominvest, which was owned by the company. The decision is in line with the strategy of North-West Telecom in the area of management of subsidiaries and associates: assets over which the company cannot exert control are to be sold off.

Dalsvyaz launched test operations of its wireless Internet access unit using Wi-Fi technology in the Primosk, Kamchatka, Sakhalin, Amur and Magadan regions.

June

During the annual International telecommunications conference of telecom operators Global Telecommunications Meeting (GTM-2007), which was held in Washington (USA), Rostelecom and Deutsche Telekom signed a Memorandum on Strategic Agreement, which provides for intensifying mutual relations on a number of projects and holding regular meetings to assess the results achieved and the development potential for value-added services.

CenterTelecom began to implement the first stage of a project to build a 3.5 GHz wireless broadband network using BreezeMAX equipment in the Moscow, Vladimir, Tambov and Tula regions of the Central Federal Districts of the Russian Federation.

Dalsvyaz announced plans to complete the consolidation of its subsidiaries Sakhainugol-Telecom and A-Svyaz by year-end 2007.

May

Rostelecom was announced the winner of a prestigious quality award by the RF Ministry of Telecommunications in the area of quality in the category "Telephone Operators".

Vice prime minister of Russia Sergey Naryshkin honored the General Director of Svyazinvest Alexander Kiselev at a meeting of the Telecommunications Ministry with a Certificate of Merit for achievements in the field of telecommunications and many years of conscientious work.

April

The Central Telegraph Group of companies began to provide a full package of Triple Play services under the Qwerty brand, thus becoming the first company in the Moscow region to offer its subscribers a complete range of telecommunications solutions by a single operator using one dedicated access line: high-speed Internet and access to the resources of the largest local network in the Moscow region, smart household telephony and digital interactive television.

VolgaTelecom's VT-4 bonds passed the listing procedure on MICEX and were included in the level-1 A Quotation List.

The above listing of the Volga operator's bonded loan among the highest level confirm the company's adherence to bond market requirements and broadened the circle of potential investors which can invest in the company's securities.

The Board of Directors of Dalsvyaz adopted a decision to diversify the company's business by selling off its cellular assets and rolling out high value-added telecom services.

Based on the results of Q12007, the number of Sibirtelecom's cellular subscribers reached 3.4 mln. The company's subscriber base rose 8.9% y-o-y in 2007 with quarterly growth of 276,300 subscribers.

Uralsvyazinform completed a transaction to sell VolgaTelecom 33.43% stake of common shares in Tatarstan-based cellular operator Tatincom-T.

March

Companies of the Svyazinvest Group took part in proceedings of the International exhibition CeBIT-2007 in Hanover (Germany) from March 15-21, 2007 as part of the Russian exhibition "Russia - Partner Country CeBIT-2007", where advanced telecommunications services were showcased.

Southern Telecommunications Company commenced the construction of its fiber-optic telecom line on the Sadovoye - Malye Derbety - Bolshoi Tasrytsyn - Tsagan-Aman route in the Republic of Kalmykia. The fiber-optic telecom line is slated for commissioning before the end of 2007.

General Director or North-West Telecom, Vladimir Akulich was awarded a second degree medal in the order "For Merit to the Homeland". The respective presidential decree was signed by Vladimir Putin on March 16, 2007.

February

The first meeting was held of the Coordinating Committee of Volga Telecom. This body is in charge of raising the quality of corporate governance. Members of the Committee include the general director, his deputies in the respective areas of business and deputy general directors, i.e. the eleven directors of VolgaTelecom's branches.

North-West Telecom was awarded a class-3 Certificate of the All-Russian competition "Russian Organization of High Social Efficiency".

January

According to an estimate by iKS-Consulting, VolgaTelecom, operating under the J brand, became one of Russia's largest broadband Internet operators. The company ranked third in the rating with 120,000 ADSL Internet subscribers as of year-end 2006.

Based on the results of a tender held on December 7, 2006, Dalsvyaz was awarded the right to acquire a 51% stake of common shares in the charter capital of Sakhatelecom.

2006

In December 2006 Comstar-UTS picked up a blocking stake in Svyazinvest from Mustcom Ltd.

Sales generated by Svyazinvest Group's concerns jumped 13% on the year to Rub 218.3 bln, telecom earnings climbed 10.5% against the previous year to Rub 208.1 bln and net profit totaled Rub 19.6 bln, representing an 8.8% upsurge.

Local voice lines in service reached 31.7 mln compared to 31.3 mln as of the beginning of the year. Companies making up Svyazinvest Group put into service 12,000 km of telecommunications lines, while the digitalization rate of their networks rose from 60.1% to 63.3%.

In 2006, the price formation policy for telecom services underwent significant changes: since January 1, 2006 interconnect and traffic transmission services became regulated. Households were offered to select payment options for telecommunications services. The Calling Party Pays principle was introduced and a detailed list of regulated local voice services was worked out.

As of December 31, 2006 Svyazinvest Group's concerns held stakes in 232 businesses, including controlling stakes in 92 businesses and blocks of shares ranging from 20% to 50% in 51 enterprises.

2005

Revenue earned by Svyazinvest Group's concerns jumped 14.2% on the year to Rub 211.8 bln, telecom earnings climbed 14.9% against the previous year to Rub 204.9 bln and operating profit came to Rub 50.9 bln, an increase of 13.4%.

Local voice lines in service reached 36.09 mln vs. 34.89 mln at the beginning of the year. Companies that make up Svyazinvest Group put into service 12,400 km of telecommunications lines, while the digitalization rate of their networks rose from 51.11% to 56.25%.

As of December 31, 2005 Svyazinvest Group's concerns participated in 346 businesses, including controlling stakes in 96 companies and blocks of shares ranging from 20% to 50% in 65 enterprises.

2004

Revenue reported by Svyazinvest Group's concerns surged 23% compared to 2003, reaching Rub 185.5 bln, while telecom earnings climbed 23% against the previous year to Rub 178.4 bln and operating profit increased 15.7% to Rub 44.9 bln. Meanwhile, operating margin came in at 32%.

Local voice lines in service came to 34.89 mln, up from 32.96 mln at the beginning of the year. Companies controlled by Svyazinvest Group put into service 17,720 km of telecommunications lines and 288,400 lines of automatic DLD and ILD telephone facilities. Network digitalization rose from 43.8% to 51.1%.

As of December 31, 2004 Svyazinvest Group's businesses participated in 410 enterprises, including controlling stakes in 102 concerns and equity positions in the range of 20-50% in 79 companies.

2003

Svyazinvest Group's revenues climbed 26.1% y-o-y to Rub 151.1 bln, while telecom income spiked 26.3% on the year to Rub 145.3 bln. Operating profit amounted to Rub 39.4 bln (up 26%) and operating margin came in at over 35%.

Local voice lines put into service came to 32.96 mln against 31.26 mln as of the beginning of the year. Svyazinvest Group's businesses put into operation 14,100 km of telecommunications lines and 53,000 lines of automatic DLD and ILD telephone facilities. Network digitalization went up from 37.46% to 43.84%.

As of December 31, 2003 Svyazinvest Group's companies participated in 511 enterprises, including controlling stakes in 106 concerns and 20-50% equity positions in 114 companies. A number of deals were transacted during the year to divest stakes in companies that are unpromising and risky in terms of investments. At the same time, regional telecom operators bought up stakes in wireless GSM providers that offer a wide range of value-added telecom services.

For the first time in its history, at the initiative of Svyazinvest, long-term forecasts for economic development for the period up to 2010 were worked out and approved by the boards of directors at the holding's subsidiaries. Concerns that are part of Svyazinvest Group engineered marketing strategies until 2006. For the first time RTOs drafted and published their financial reports for 2006, which were compiled under International Accounting Standards. A project to introduce the single ERP system got under way at Svyazinvest and its subsidiaries.

2002

Under the supervision of a highly professional team of managers, an unprecedented reform was carried out in the Russian telecommunications industry in just 18 months. At the end of 2002 72 regional operators were folded into seven large and economically powerful regional companies (CenterTelecom, North West Telecom, Volga Telecom, South Telecom Company, Uralsvyazinform, SibirTelecom and Dalsvyaz), with each of them comparable to Europe's leading operators in terms of business scale. For the first time in 2002 detailed annual budgets (drafted on the basis of unified methodological principles based on International Financial Reporting Standards) were compiled and approved in 2002.

Sales generated by the Group's concerns jumped 29.6% y-o-y to Rub 99.8 bln, telecom earnings leapt 25.3% to Rub 88.1 bln and operating profit was recorded at Rub 28.2 bln, representing a 48.4% upsurge. Meanwhile, operating margin was in the region of 40%.

Svyazinvest Group's companies put into service 7,704.4 km of fiber optic and 813.7 km of digital relay lines. At the end of 2002 the Group's local voice lines in service amounted to 26.54 mln lines vs. 25.03 mln lines as of year-start 2002. Network digitalization increased from 34.86% to 40.73%.

2001

As part of measures to prepare for legal reorganization a procedure was set in place to assess the subsidiaries, financial terms of the reorganization were worked out and agreed upon, and draft takeover agreements were compiled. Shareholder meetings held at 72 concerns that participated in the merger gave the go-ahead to restructuring. The stock market read shareholder meeting results with optimism, triggering an upswing in the market caps of regional telecoms: depending on the region the aggregate capitalizations of the merged companies spiked in the range of 40% to 4 times.

In August 2001, level-1 ADR programs launched on the shares of Dalsvyaz, North West Telecom, SibirTelecom and CenterTelecom passed registration. ADR trading on the OTC market kicked off in September 2001.

In April 2001 Svyazinvest's management held a large-scale road show in the United States and European countries, conducting meetings with more than 20 big investors.

During 2001 Svyazinvest's estimated capitalization jumped 10% to $1.33 bln. The stock liquidity of telecom operators improved dramatically, with turnover in regional telecoms up a record 7 times and the bid/ask spread narrowing 2-5 times. Base companies of regional telecom enterprises were assigned credit ratings for the first time.

Aggregate revenue earned by Svyazinvest's regional subsidiaries and related concerns soared 25.7% to Rub 91.9 bln, operating profit amounted to Rub 21.6 bln, leaping 20% y-o-y, while operating margin came in at 33%.

As of January 1, 2002 total local voice lines put into service by Svyazinvest's subsidiaries and affiliated companies amounted to 29,683,000 lines, with a network digitalization rate equal to 32.12%.

2000

The holding's management team devoted close attention to operations that aimed to boost earnings and drive the investment appeal of regional telecoms. It was decided that it is necessary to enlarge subsidiaries and preparations got under way to merge 75 regional providers into 7 super regional operators. The first stage of the reorganization (consolidation of the operators located within one region) was finalized in 2000.

A program was launched in 2000 to have the shares of base regional telecom operators listed on international stock exchanges by issuing American Depositary Receipts (ADRs). J.P. Morgan was appointed the unified custody bank for this project.

Gross profit climbed 26.1% to Rub 72.4 bln, operating profit surged 17% against 1999 to over Rub 19 bln and operating margin reached 37%.

1999

In November 1999 Svyazinvest's Board of Directors made amendments to the company's charter, according to which the company turned into a management company. As part of the measures to assign the status of a management company to Svyazinvest work got under way to improve procedures for manage associates, specifically, by consolidating companies located in one region.

Shares of 65 related companies that are part of Svyazinvest were listed on RTS in 1999. The market value of the subsidiaries spiked, with their aggregate capitalization rocketing 195% to $1.76 bln.

On the whole, Svyazinvest's revenue increased 35.1% to Rub 56.2 bln.

1998

"The Procedure for Holding Investment Tenders to Sell State-Owned Stakes (25%-2 shares) in Svyazinvest" was worked out in 1998 and agreed upon with the State Telecommunications Committee of Russia, the State Property Ministry of Russia and the Russian government. To this end, development investment programs were also worked out for 45 regional companies, which were to be financed using funds from the sale of a second stake in Svyazinvest. However, the tender was called off due to the financial crisis in 1998.

1997

The state's stakes in Rostelecom, Central Telegraph, Yekaterinburg City Telephone Network and Giprosvyaz, assessed at market price, were contributed to the holding's charter capital as payment. The charter capital of Svyazinvest rose 2.5-fold and stood at Rub 19,518.3 bln.

In accordance with Resolution #618 issued by the Russian government on May 23, 1997, the Russian Federal Property Fund and the State Committee of the Russian Federation for State Property Management put up for sale an interest equaling 25% + 1 share in Svyazinvest at a cash auction without any investment terms. As a result, the equity position in Svyazinvest went under the hammer for $1,875 mln (against a starting bid of $1,180 mln) to Cyprus-registered consortium Mustcom Ltd that pooled the interest of Onexim Bank, investment company Renaissance Capital, investment bank Deutsche Morgan Grenfell, Morgan Stanley Asset Management and George Soros-managed Quantum Fund.

1995 - 1996

Pursuant to Presidential Decree #1989 dated October 10, 1994 "On Specific Features of State Management of the Public Switched Network in the Russian Federation", Resolution #1297 dated November 25, 1994 and Resolution #742 dated July 24, 1995, issued by the Russian government, open joint stock company Investment Telecommunications Company (OAO Svyazinvest) was incorporated to attract financial flows of foreign and domestic investors into the telecommunications sector. Svyazinvest's charter capital was formed by consolidating state-owned stakes in 85 joint stock telecommunications companies. Svyazinvest passed official state registration on September 18, 1995.