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Articles & publications
27.05.2010
The reorganization of Svyazinvest will not result in major changes on the Russian telecom market – deputy CEO of the holdingITAR-TASS
The reorganization of Svyazinvest will not entail any major changes on the Russian telecommunications market. This was the assurance given to the attendees of the forum “Telecom 2010” by deputy general director of the state holding Alexander Provotorov.
“Many telecom operators are fearful that the state will create a monster which will crush other market players, but I do not think the reorganization of Svyazinvest will have any overwhelming impact on the telecommunications market”, he said.
According to Mr. Provotorov, the merger of regional telecommunications operators (RTOs), using its key asset Rostelecom as the consolidation hub, is a positive step for the whole market, and, first and foremost, for Svyazinvest. He is confident that the New Rostelecom, as people at the holding call it, would in any case not be able to put pressure on the Big-3, whose subscriber base significantly exceeds that of Svyazinvest.
The stability of the Big-3, according to Provotorov, is shown by the fact that “the holding’s revenues have been in decline in recent years, while these telecom operators have seen gains”.
”Our challenge is to fit in with the current market trends”, the deputy head of the holding noted. He went on to say that the holding intends to devote special attention to rolling out broadband Internet, wireless datacom technologies, achieve regional expansion and increase in content volume. He also pointed out that the holding intends to back away from the idea of becoming a fourth federal cellular operator. “We want to turn into a universal telecommunications operator”, Provotorov emphasized.
State telecommunications holding Svyazinvest is currently in the process of folding its seven fixed-line regional telecom operators into national LD operator Rostelecom. All legal procedures related to the reorganization of the holding and the merger between RTOs and Rostelecom are supposed to be wrapped up by February or March 2011, Mr. Provotorov said. The draft merger plan has been approved by RTO boards of directors and it will be up for discussion at shareholders meetings in June. As pointed out earlier by the general director of Svyazinvest Evgeny Yurchenko, the restructuring of Svyazinvest, as a result which the holding’s companies throughout the country are to be merged into a single integrated operating company, will make it possible to optimize the distribution of financial resources, and also “to raise managerial flexibility, boost market capitalization and reduce the cost of attracting debt financing”.
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