Transcript Слайд 1 - Rustocks.com

JSC SVYAZINVEST
ON TELECOMMUNICATIONS MARKET
FORWARD-LOOKING STATEMENTS
_Certain statements in this presentation are not historical facts and represent “forward-looking” statements. Example of such forwardlooking statements include, but are not limited to:
_projections or expectations of revenues, profit (or loss), earnings (or loss) per share, dividends, capital structure, other financial
indicators or ratios;
_statements of our plans, objectives or goals, including those related to products or services;
_statements of future economic indicators;
_statements of prerequisites underlying such statements.
_Words such as “believes”, “expects”, “supposes”, “plans”, “is going to” and “intends”, as well as similar expressions, are intended to
identify forward-looking statements but for all that are not the exclusive means of identifying such statements.
_By their very nature, forward-looking statements imply some inherent risks and uncertain points, both general and specific, and there is
some risk that the plans, expectations, forecasts and other forward-looking statements will not be realized. You should remember that
owing to a number of important factors, actual results might substantially differ from the plans, objectives, expectations, estimates and
intentions expressed in such forward-looking statements, including our ability to execute our restructuring and cost reduction programme.
_When relying on forward-looking statements, you should carefully analyze the foregoing factors and other uncertainties and events which
are not clear, especially in light of the political, economic, social and legal environment in which the Company operates. Such forwardlooking statements are valid only as of the date on which they are published, and the Company does not undertake any obligation to
update or revise any of them whether as a result of new information, new events or otherwise. The Company does not make any
statement, does not provide any affirmation and does not publish any forecast that the results anticipated by such forward-looking
statements will be achieved. Such forward-looking statements represent only one of many possible scenarios of situation and should not
be considered as the most likely or standard course of events.
2
_SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT
INDICATORS
_IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF
SVYAZINVEST GROUP
_UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND
FOR SVYAZINVEST GROUP
_PROSPECTS FOR SVYAZINVEST GROUP
3
RUSSIA TODAY
Pace of growth of Russian economy, % *
Growth of Real Wage in Russia, % *
15,0
7
14,5
6
14,0
13.3
13,5
5
12.8
12.6
13,0
12,5
4
12,0
3
11,5
11,0
2
10,5
1
10,0
Worls
2005
USA
EU
2006
Russia
2005
2007(e)
 High and sustainable pace of growth of
Russian economy
2006
2007(e)
Direct foreign investment in Russian economy,
USD bln *
46
41
41
 Growth of common welfare and consumer's
demand
36
 Russian economy is becoming more attractive
in the eyes of foreign partners
21
31
26
26
13
16
11
6
1
4
*- source: Ministry for Economic Development and Trade of the Russian Federation
2005
2006
2007(e)
SVYAZINVEST: STRUCTURE AND COVERAGE
State
75% - 1 share
Comstar-UTS
17.31% + 1 share
MGTS Finance
7.69%
North-West Telecom
4.4 mln lines in service
Market cap equals
USD 2,011mln*
CenterTelecom
6.7 mln lines in service
Market cap equals
USD 1,796mln*
Svyazinvest
Rostelecom
MGTS
Other
Controlling stake
7 RTOs
South Telecom
4.1 mln lines in service
Market cap equals
VolgaTelecom
USD 783 mln*
5.0 mln lines in service
Sibirtelecom
Market cap equals
4.7 mln lines in service
USD 1,903 mln*
Market cap equals
USD 1,815 mln*
Dalsvyaz
1.5 mln lines in service
Market cap equals
USD 684 mln*
Blocking stake
_Foundation of Svyazinvest – September 18, 1995
_Sale of the company’s blocking stake to Mustcom - July 1997
_Corporate integration: 72 telecom companies were consolidated
into 7 interregional companies throughout 2000-2002
5
Uralsvyazinform
8.3 mln lines in service
Market cap equals
USD 2,522 mln*
* - market caps as of November 9, 2007
_Rostelecom owns a powerful backbone network spreading across almost all the
territory of Russia. The Company’s network is around 200,000 km long. The level of
Company’s market capitalization equals $7,746mln.
_At present, the estimated capitalization of Svyazinvest is some $9.8 bln.
KEY PERFORMANCE INDICATORS OF SVYAZINVEST GROUP *
International Accounting Standards
Russian Accounting Standards
REVENUE
[USD, bln]
EXPENSES
[USD, bln]
OPERATING
INCOME
[USD, bln]
EBITDA
[USD, bln]
NET PROFIT
[USD, bln]
6
17.9%
16.0%
17.9%
17.9%
6.82
8.04
9.33
5.90
6.96
6.55
7.72
2005
2006
2007 F
3Q2006
3Q2007
2005
2006
21.9%
14.6%
16.9%
15.9%
5.27
6.43
7.37
4.53
5.26
5.84
6.83
2005
2006
2007 F
3Q2006
3Q2007
2005
2006
4.1%
21.9%
24.4%
1.55
1.61
1.96
1.37
2005
2006
2007 F
3Q2006
15.0%
41.4%
1.70
3Q2007
0.70
0.89
2005
2006
30.6%
1.97
2.27
3.21
2005
2006
2007 F
13.6%
26.9%
1.89
24.7%
2.47
3Q2007
3Q2006
1.86
2.32
2005
2006
47.7%
71.6%
32.1%
0.64
0.72
1.24
0.70
1.04
0.25
0.33
2005
2006
2007 F
3Q2006
3Q2007
2005
2006
* - hereinafter (unless otherwise indicated) : a) aggregated indicators are given according to RAS; b) Svyazinvest Group includes the following companies:Rostelecom, 7 RTOs, Central
Telegraph, Dagsvyazinform
MARKET SHARE OF SVYAZINVEST GROUP OF COMPANIES *
INTRA-ZONAL TELEPHONY MARKET
4%
DATACOM MARKET
46%
TELECOMMUNICATIONS MARKET
96%
54%
LD / ILD MARKET
67%
16%
MOBILE TELEPHONY MARKET
84%
33%**
92%
LOCAL TELEPHONY MARKET
8%
- Share of Svyazinvest group (Rostelecom + 7 RTOs)
- Share of other providers
7
* - as of the end of 1H2007
** - on the licensed coverage area of 7 RTOs
17%
83%
KEY INFRASTRUCTURE INDICATORS OF SVYAZINVEST GROUP
INSTALLED CAPACITY, mln lines
35
DIGITALIZATION RATE, %
2005
2006
2007 (target)
80
2005
2006
2007 (target)
70
31
60
27
31.3
31.7
32.3
67.7
50
60.1
23
63.3
40
19
30
-1% +5%
15
20
INSTALLED CAPACITY
8
DIGITALIZATION
INVESTMENT POLICY: DYNAMICS AND STRUCTURE OF CAPITAL
INVESTMENT
INVESTMENT, USD, bln
2,5
1.93
2
1.53
1,5
1
1.40
13%
10%
24%
29%
23%
0,5
12%
22%
39%
32%
40%
29%
27%
2006
2007 (forecast)
0
2005
9
Traditional telephony
Development of infrastructure
New services and ITtechnologies
Other
KEY OPERATIONAL INDICATORS OF SVYAZINVEST GROUP
LINES PER EMPLOYEE, unit
REVENUE PER EMPLOYEE, USD thousand
2007*
144
2006
2007*
+ 16%
+22%
102
2004
0
50
100
0
200
10
20
NUMBER OF EMPLOYEES, employees, thousand
243
2007*
- 10.9%
273
2006
-9.0%
10
* - forecast
2005
300
2004
316
0
100
-5.0%
200
300
+ 23%
19
2004
150
+ 30%
23
2005
+15%
89
+ 30%
29
2006
124
2005
38
400
500
30
40
50
60
DEBT OVERVIEW
CAPITAL STRUCTURE, USD bln
RATIO BETWEEN CURRENCY AND RUBLE-DENOMINATED LOANS
$ 14.2 bln.
15
$ 12.2 bln.
12
$ 10.4 bln.
9
28%
6
27%
3
22%
23%
29%
30%
45%
49%
as of Jan 1, 2006
as of Jan 1, 2008
as of Jan 1, 2008 *
14
14
18
86
86
82
as of Jan 1, 2006
as of Jan 1, 2007
as of Jan 1, 2008 *
60
20
0
0
long-term liabilities
80
40
47%
equity capital
100
short-term liabilities
ruble-denominated
currency
AVERAGE COST OF CREDIT RESOURCES, %
In 2006 – 2007, major changes were made to the structure,
14
13
12
12.0
cost and amount of the debt portfolio of the companies in
11.4
11
9.3
10
9.1
9
8
resources are due both to the upgrade of the RTOs’ credit
ratings and to the general market correction.
7
6
as of Jan 1, 2006
as of July 1, 2006
as of Jan 1, 2007
ruble-denominated loans
11
Svyazinvest Group. Changes in the cost of attracting credit
* - forecast
as of Jan 1, 2008 *
BOND ISSUES
07
Date of
issue
21.03.06
Rub 3 bln ($109 mln)
Maturity
date
6 years
Central Telegraph
03
05.04.06
Rub 700 mln ($25 mln)
3 years
No offer
Interest
rate
8.4% for 3
years
9.75%
Sibirtelecom
07
24.05.06
Rub 2 bln ($74 mln)
3 years
No offer
8.65%
D2
07.06.06
Rub2 bln ($75 mln)
6 years
In 4 years
D3
07.06.06
Rub 1.5 bln ($56 mln)
3 years
No offer
8.85% for
4 years
8,6%
05
05.09.06
Rub 3 bln ($112 mln)
5 years
In 2 years
VolgaTelecom
VT-4
12.09.06
Rub 3 bln ($112 mln)
7 years
In 3 years
North-West Telecom
04
14.12.06
Rub 2 bln ($76 mln)
5 years
Call option in 2 years at 102%
South Telecom
05
06.06.07
Rub 2 bln ($77 mln)
5 years
In 3 years
Company
Uralsvyazinform
Dalsvyaz
Dalsvyaz
CenterTelecom
Series
Nominal value*
Offer / other conditions
In 3 years
_Total volume of placement in 2006-2007 was Rub 19.2 bln (USD 716 mln)
12 * Estimated average USD rate was based on the exchange rate quoted by the CBR as of the placement date
8.09% for
2 years
7.99% for
3 years
8.1%
7.55% for
3 years
SVYAZINVEST GROUP: DYNAMICS OF CAPITALIZATION
CALCULATED COMPARED WITH THE RTS INDEX, 2006-2007
10 000
2 400
Svyazinvest
RTS index
9 000
2 200
2 000
1 800
points
US D, mln
8 000
7 000
1 600
6 000
1 400
5 000
13
Oct-07
1 000
S ep-07
Aug-07
J ul-07
J un-07
May-07
Apr-07
Mar-07
F eb-07
J an-07
Dec-06
Nov-06
Oct-06
S ep-06
Aug-06
J ul-06
J un-06
May-06
Apr-06
Mar-06
F eb-06
J an-06
4 000
1 200
RTOs AND ROSTELECOM SHAREHOLDER CAPITAL STRUCTURE
NORTH-WEST TELECOM
CENTERTELECOM
37%
40%
38%
38%
36%
12%
12%
17%
38%
36%
9%
SIBIRTELECOM
ROSTELECOM
38%
14
14%
25%
22%
39%
38%
9%
41%
13%
DALSVYAZ
14%
11%
URALSVYAZINFORM
SOUTH TELECOM
11%
42%
38%
11%
12%
VOLGATELECOM
9%
39%
38%
13%
10%
Non-residents (legal entities)
Individuals
Residents (legal entities)
JSC Svyazinvest
RTOs AND ROSTELECOM CREDIT RATINGS
Company
Rating
Outlook
Agency
BB-/ВВ-
Stable / Stable
S&P/Fitch
South Telecom
В-
Credit Watch Positive
S&P
CenterTelecom
B+/B
Positive / Positive
S&P/Fitch
VolgaTelecom
BB-
Stable
S&P
Dalsvyaz
В+
Stable
Fitch
BB-/B+
Stable / Stable
S&P/Fitch
Sibirtelecom
B+
Stable
Fitch
Rostelecom
BB-
Stable
S&P
North-West Telecom
Uralsvyazinform
15
_SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT
INDICATORS
_IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY
OF SVYAZINVEST GROUP
_UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND
FOR SVYAZINVEST GROUP
_PROSPECTS FOR SVYAZINVEST GROUP
16
IN 2007, THE RUSSIAN TELECOM MARKET HAS DEVELOPED
ACCORDING TO GENERAL INTERNATIONAL TENDENCIES
HOWEVER, IT HAS ALSO BEEN CHARACTERIZED BY A NUMBER OF SPECIFIC FEATURES
GENERAL TENDENCIES
SPECIFIC TENDENCIES
1– Mobile traffic replacing fixed traffic
1– Switch to new system of tariff plans
2– Development of broadband Internet
access
2– Introduction of “Calling Party Pays“
principle
3– Liberalization of LD market
3– Introduction of new interconnect rules
4– Convergence of telecom services
ALL THESE FACTORS HAVE A DIFFERENT IMPACT
COMPANIES OF SVYAZINVEST GROUP
KEEP THEIR MARKET POSITIONS
17
LIBERALIZATION OF LD MARKET
 SINCE JANUARY 1, 2006 LD MARKET HAS BEEN LIBERALIZED

32 LICENCES HAVE BEEN ISSUED TO DATE
 SEVERAL PROVIDERS ARE ACTUALLY OPERATING ON THE LD MARKET: ROSTELECOM, GOLDEN TELECOM,
MTT, TRANSTELECOM
MARKET POSITION OF ROSTELECOM ON LD
MARKET, ESTIMATED TRAFFIC (1H2007)
MARKET POSITION OF ROSTELECOM ON ILD
MARKET, ESTIMATED TRAFFIC (1H 2007)
91%
89%
- Share of Rostelecom
18
Source: iKS-consulting, internal accounts of
Svyazinvest
- Share of other operators
INTRODUCTION OF “СALLING PARTY PAYS” PRINCIPLE
MOU F2M, [MIN / MONTH]
+24%
+31%
+14%
+24%
22
27
25
12
Center
46
14
NWT
Volga
20
STC
2H2006
62
18
USI
Sibir
23
DSV
+12%
+21%
+17%
41
26 29
17
+9%
50
28
+11%
+16%
+9%
+12%
+19%
F2M REVENUE, [USD MLN]
-11%
47
47
42
40
+32%
26
17 20
Center
NWT
1H2007
Volga
STC
2H2006
11 14
USI
Sibir
DSV
1H2007
SUBSCRIBERS ACTIVITY FOR F2M CALLS AS OF
JUNE, 2007, %
SUBSCRIBERS ATTITUDE TO THE
INTRODUCTION OF CPP, %
10
3
22
19
positive
19
neutral
negative
Source: Research by ComCon, March 2007
+17%
32
24 26
RTOs
58
52
72
74
active
inactive
inactive after introduction of fees
Source: Research by ROMIR, June 2007
279
238
RTOs
SWITCH TO NEW SYSTEM OF TARIFF PLANS (1)
TARIFF PLANS
(PSTN, average for RTOs), USD
CURRENT TARIFFS (PSTN as of date
below, average for RTOs), USD
18
18
15
15
**
12
7.8
9
6
4.2
5.7
5.8
8.7
6.7
10.0
8.1**
¢ 0.7
16*
6
8*
3
3
0
0
01.01.04
01.01.05
indiv iduals
01.01.06
01.02.07
4.8
368 min
3.2
¢ 0.9
4.8
4.8
12
16 *
9
11 *
6
3
0
Subscriber
organisations
Combined
Time-based
Tariff limit
Tariff offered by RTOs
- Payment for line
-Cost per minute of connection
-Payment for base number of connections
-Payment for maximum number of connections
ACCORDING TO RF CIVIL CODE, THE CURRENT
PAYMENT SYSTEM REMAINS EFFECTIVE FOR THOSE
WHO FAIL TO SELECT A TARIFF PLAN
20
- 32%
15
11
12
9
SUBSCRIBER TARIFF PLAN (PSTN, average
for RTOs), USD
18
* - Total fee incl. line rental
** - Tariff for regions where it is not technically possible to introduce tariff plans
FORMATION OF TRANSITIONAL PERIOD
MASS PR CAMPAIGN CONDUCTED
SWITCH TO NEW SYSTEM OF TARIFF PLANS (2)
BREAKDOWN OF
INDIVIDUAL SUBSCRIBERS
BY TARIFF PLAN (IN
REGIONS WHERE IT IS
TECHNICALLY POSSIBLE
TO INTRODUCE TARIFF
PLANS), AS OF OCTOBER 1,
2007
1%
23%
25%
26%
17%
52%
51%
57%
45%
46%
66%
Combined TP
Time-based TP
Unlimited TP
76%
33%
DSV
NWT
1%
19%
24%
24%
USI
42%
Center
3%
14%
37%
27%
24%
Volga
Sibir
11%
STC
RTOs
5%
11%
Combined TP
25%
40%
47%
21%
18%
26%
26%
21%
30%
8%
14%
63%
25%
19%
45%
17%
DSV
21
12%
16%
31%
48%
BREAKDOWN OF
INDIVIDUAL SUBSCRIBERS
BY TARIFF PLAN (TAKING
INTO ACCOUNT THE
REGIONS WHERE IT IS NOT
TECHNICALLY POSSIBLE
TO INTRODUCE TARIFF
PLANS), AS OF OCTOBER 1,
2007
6%
15%
31%
62%
50%
31%
7%
NWT
43%
34%
8%
USI
Center
Volga
Sibir
STC
RTOs
Time-based TP
Unlimited TP
Subscriber TP
_SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT
INDICATORS
_IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF
SVYAZINVEST GROUP
_UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND
FOR SVYAZINVEST GROUP
_PROSPECTS FOR SVYAZINVEST GROUP
22
GROWTH ON DATACOM MARKET
GROWTH FORECAST FOR TELECOM MARKET, USD BLN
СAGR
%
+ 11%
4
Internet and
datacom
3
Mobile communications
13
LD services
Local voice
15
5
17
3
5
3
5
3
6
2006
07
08
EARNINGS FORM DATACOM SERVICES, USD BLN
5
19
6
20
7
+23%
4
22
+ 11%
3
6
6
7
09
10
2011
0%
+ 8%
Individuals
Organisations
_Datacom will be the fastest growing market segment.
Most expansion will come from broadband Internet
access.
_ The penetration of broadband Internet access (BIA)
will grow in line with disposable income,
computerization, network upgrades and cost reduction.
1
1
2
2
2006
07
08
2
3
09
10
3
17%
2011
Source: McKinsey
Source: McKinsey
INTERNET PENETRATION AND BIA IN RUSSIA (SUBSCRIBERS), %
30%
25%
20%
15%
10%
5%
0%
2005
2006
2007
2008
2009
BIA penetration, %
23
3
3
3
+30%
2
3
3
СAGR
%
+ 23%
Source: UralSib
2010
2011
2012
2013
Internet penetration, %
GROWTH POTENTIAL OF SVYAZINVEST GROUP IN THE NEW
SERVICES SEGMENT, USD mln *
DYNAMICS OF INVESTMENTS IN THE DEVELOPMENT OF
NEW SERVICES AND IT TECHNOLOGIES, USD mln *
753
1200
700
600
500
360
400
900
447
140
0
2003
912
542
300
2004
2005
2006
2007
(forecast)
BREAKDOWN OF REVENUE FROM UNREGULATED
SERVICES IN 2007 (FORECAST)
Internet
5%
4% 2%
Digital datacom networks
TV
Intelligent telecom networks
IP telephony
14%
24
5.2%
75%
* - not incl. cellular communication
212
2004
12%
9%
6.7%
3.6%
236
100
0
9.8%
600
300
200
REVENUE FROM NEW SERVICES IN TOTAL REVENUE
OF SVYAZINVEST GROUP, USD mln*
6%
3%
353
0%
2005
2006
2007
(forecast)
Revenue from unregulated services
Share of revenue from unregulated services in total revenue
+ 70 %
_Based on our forecast,
Internet and datacom will
achieve revenue growth of
70% in 2007.
BROADBAND ACCESS SERVICES
MARKET SHARE OF DATACOM SERVICES, %
60%
59%
65%
57%
65%
63%
67%
65%
58%
53%
43%
37%
48%
46%
NUMBER OF xDSL ANF ETTH PORTS ENABLED AS OF
OCTOBER 1, 2007, TH.
300
55%
54%
250
200
235
255
238
214
150
100
132
152 133
50
24%
0
Center
NWT
Volga
STC
2006
USI
Sibir
DSV
CenterTelecom
VolgaTelecom
Uralsvyazinform
Dalsvyaz
RTOs
1H2007
KEY REGIONAL BRANDS AND ARPL (3Q2007)
Company
CenterTelecom
North-West Telecom
South Telecom
VolgaTelecom
Uralsvyazinform
Sibirtelecom
Dalsvyaz
25
ARPL, $
26
22
39
25
34
31
35
Brand
Domolink
Avangard
DISEL
J
Utel
Webstream
Disly
NWT
South Telecom
Sibirtelecom
40%
SVYAZINVEST GROUP ON THE MOBILE TELEPHONY MARKET
LICENCE COVERAGE OF GSM OPERATORS OF
SVYAZINVEST GROUP
MOBILE SUBSCRIBERS BASE, thousand
6000
4,900
4,412
4000
3,674
4,170
3,140 3,198
2, 472
2,035
2000
664
1,100
1,973
1, 887
1, 202
987
476
0
2003
2004
Volga
2005
2006
Ural
2007 (target)
Sibir
_In 2006, the Group’s mobile business policy was to increase the presence of RTOs on the cellular market and to
consolidate assets.
_Svyazinvest Group companies offer mobile services in 27 regions of the Russian Federation.
26
FINANCIAL RESULTS OF CELLULAR OPERATORS OF SVYAZINVEST
GROUP
VOLGA, USD mln
URAL, USD mln
250
90
600
150
500
200
60
120
400
150
90
206
100
300
315
155
30
98
50
0
81
69
34 11
2003
33 11
2004
Revenue
40
17
56
EBITDA
2006
Net Profit
66
0
2007 (forecast)
126 52
93 38
28
2004
2005
Revenue
EBITDA
SIBIR, USD mln
450
210
400
180
350
150
300
405
250
120
320
200
90
229
150
50
0
145
78
2003
2004
143
2005
2006
86
170 86
60
30
0
Revenue
27
51
76 40 24
116 71
EBITDA
Net Profit
169 72
204
82
30
0
2003
Capex
100
60
222
162
100
0
2005
422
200
79 36
25
493
2007 (forecast)
Capex
2006
Net Profit
2007 (forecast)
Capex
TRENDLINES IN AVERAGE ARPU* AND MOU* OF MOBILE ASSETS OF
SVYAZINVEST GROUP IN THE MAIN REGIONS
AVERAGE MOU TRENDLINE, min.
AVERAGE ARPU TRENDLINE, USD
320
25
20
20
18
16
15
12
11
8
9
14
10
240
13
10
5
7
6
8
8
160
144
6
120
120
98
80
2003
2004
2005
Volga
2006
Ural
2007 (forecast)
Sibir
*ARPU – average revenue per user
**MOU – minutes of use per subscriber
28
217
211
200
0
283
275
280
2003
220
186
175
124
151
175
198
98
2004
2005
Volga
Ural
2006
Sibir
2007 (forecast)
_SVYAZINVEST GROUP: PROFILE AND DEVELOPMENT
INDICATORS
_IMPACT OF TELECOM MARKET CHANGES ON THE ACTIVITY OF
SVYAZINVEST GROUP
_UNREGULATED SERVICES – PRIMARY DEVELOPMENT TREND
FOR SVYAZINVEST GROUP
_PROSPECTS FOR SVYAZINVEST GROUP
29
SVYAZINVEST GROUP: PRIMARY OBJECTIVES
 To boost revenue by broadening the scope of services provided (employing
modern technologies) and by raising tariffs for local voice services.
 To maintain strong operating efficiency with a view to revised relations between
operators, liberalization of the LD market and emergence of new competitive
environment.
 To roll out new generation networks (NGNs) and provide a technological
framework so that the company can rapidly create and provide top-notch services
throughout the Russian Federation.
 To take further steps towards improving the efficiency of Svyazinvest Group’s
management system (to phase in ERP, to introduce a unified billing system and
OSS – Operations Support System; to implement a set of actions to use human
resources more effectively, etc.)
30
DEVELOPMENT OF LOCAL TELEPHONY MARKET
LOCAL TELEPHONY MARKET
:
Svyazinvest’s
position in 2007
1. MOU growth in the local connections
segment, [MIN / MONTH]
+20%
373
312
1Q2007
2Q2007
RTOs
2. Revenue growth in the local
connections segment, [USD MLN] *
+18%
1,894
1,605
3Q2006
3Q2007
RTOs
31
* - line rental and connection services
Market Tendencies
1. Mobile traffic replacing fixed traffic
2. Alternative operators and players
from other segments entering the
market
3. Switching voice traffic to datacom
networks
Objectives for
2012
To keep leading
positions in the
local telephony
segment
Svyazinvest
Initiatives
To increase the value of subscriber line:
1. Digitalization of networks
2. Introduction of service packages
3. New communication services
4. «Unlimited» tariffs
Market share of
Svyazinvest Group
in this segment
81%
DEVELOPMENT OF INTRA-ZONAL TELEPHONY MARKET
INTRA-ZONAL TELEPHONY MARKET
:
Svyazinvest’s
position in 2007
Market Tendencies
1. F2M revenue growth, [USD MLN]
1. Mobile traffic replacing fixed traffic
2. Reduction of tariffs
3. New players entering the market
+17%
279
238
2H2006
1H2007
Objectives for
2012
To keep leading
positions in the
intra-zonal
telephony
segment
Svyazinvest
Initiatives
RTOs
2. F2F revenue decrease, [USD MLN]
Market share of
Svyazinvest Group
in this segment
-12%
225
32
198
RTOs
2H2006
1H2007
1. To provide package offers
2. To optimize tariffs
92%
DEVELOPMENT OF INTERNET AND DATACOM MARKET
INTERNET AND DATACOM MARKET
:
Svyazinvest’s
position in 2007
1. Internet and datacom revenue growth,
[USD MLN]
+62%
551
340
3Q2006
3Q2007
RTOs
2. Rapid growth of subscriber database,
[xDSL + ETTH, th. ports]
+27%
+28%
+31%
1,359
644
33
842 1,074
RTOs
As of Jan 1
As of Apr 1
As of Jul 1
As of Oct 1
Market Tendencies
1. Growth of demand for and speed of
Internet access
2. Switching to unlimited offers
3. Competition between technologies
(DSL, ETTH, Wi-Fi, Wi-Max, 3G)
4. Content becoming increasingly
important
Objectives for
2012
To increase
market share in
the Internet
access and
datacom
segment
Svyazinvest
Initiatives
1. To develop DSL access on existing
subscribers’ lines
2. To develop ETTH as soon as market
saturation occurs
3. To establish partnerships with
content aggregating agents
Market share of
Svyazinvest Group
in this segment
59%
DEVELOPMENT OF LD MARKET
:
Svyazinvest’s
position in 2007
1. Prices for services rendered are lower
than competitors’ [Average Income
Rate, USD MIN]
0.15
0.12
2006
0.16
0.21
1H2007
Rostelecom
Competitors
2. Market share is decreasing as a result
of liberalization
94% 89%
96% 91%
ILD
DLD
2006
34
1H2007
2006
1H2007
LD MARKET
Market Tendencies
Objectives for
2012
1. New players entering the market and
competition increasing
2. Voice traffic switching to datacom
networks
3. Mobile traffic replacing fixed traffic
4. Development of intelligent telecom
networks
To keep leading
positions in the
LD
communications
segment
Svyazinvest
Initiatives
1. To protect company’s positions on the
retail market
2. To develop intelligent telecom
networks
3. To strengthen positions on the
corporate clients market, incl. at the
federal level
Market share of
Svyazinvest Group
in this segment
60%
GROWTH OF OPERATING RESULTS
Svyazinvest
Initiatives
1.
Income
2.
3.
4.
5.
To increase the share of broadband
services
To promote bundled services
To increase customer loyalty
To diversify distribution channels and
roll out a system for active agent
sales
To increase the share of corporate
clients
Svyazinvest
Initiatives
Expenses
35
1.
2.
3.
4.
5.
6.
To introduce outsourcing
To develop e-auctions
To optimize real estate assets
To optimize business processes and
organizational structure
To roll out New Generation Networks
To optimize the number of employees
2012
Between 2008
and 2012, the
income CAGR
will equal
8,5%*
Between 2008
and 2012, the
expenses
CAGR will
equal 7,2%*
* - 7 RTOs
Good FINANCIAL
RESULTS, as the
company anticipates
that income will grow
more than expenses
EBITDA
margin
41,4%*
SVYAZINVEST GROUP: PROSPECTS OF KEY PERFORMANCE
INDICATORS FOR 2008 *
REVENUE, USD bln
OPERATING EXPENSES, USD bln
9.22
9.97
2007
2008
OPERATING INCOME, USD bln
1.94
7.28
7.80
2007
2008
NUMBER OF EMPLOYEES, thousand
2.17
241
218
2007
36
* - 7 RTOs + Rostelecom
2008
2007
2008
55 bld. 2 ulitsa Plyuschikha
119121 Moscow RUSSIA
Phone: +7 (495) 727 0473
Fax: +7 (495) 727 0475
E-mail: [email protected]
Web site: www.svyazinvest.ru
37