Rostelecom eyes strategic shift

October 8, 2013 08.47 Europe/London By Chris Dziadul

Russia’s Rostelecom is set to cut its capital costs over the next few years and focus more on the provision of internet and other services.

Quoting sources discussing the company’s strategy in the period 2014-18, Vedomosti reports that investment will fall from around 20% of Rostelecom’s revenues next year to no more than 10% in 2018. By way of comparison, the figures for 2012 and 2011 were 28.4% and 28% respectively.

Rostelecom is interested in disposing of its mobile assets (Tele2) to concentrate on providing broadband internet services.

Its plans include the development of its fixed broadband, IPTV and media business.

The plans still have to be discussed by Rostelecom’s strategy committee and board of directors, after which they have to be submitted to the government by December 4.

IPTV is already a lucrative business for Rostelecom, with revenues growing by 25% in Q2. Broadband internet access revenues meanwhile increased by 8%, and both services offsetting the long-term decline in the telco’s telephony business.