Bloomberg News

Svyazinvest Sees Sales Rising to $9.2 Billion in 2007

February 06, 2007

OAO Svyazinvest, Russia's national fixed-line phone company, expects sales growth of at least 15 percent on new services such as broadband Internet, Chief Executive Officer Alexander Kiselev said.

``Broadband is the locomotive, our strategic priority,'' Kiselev told reporters in Moscow today. A 15 percent increase would mean sales of about $9.2 billion this year, based on the company's 2006 sales forecast of 213 billion rubles ($8.03 billion), given in December. Kiselev didn't give a specific figure today.

Broadband subscriptions are expected to more than double to 1.5 million this year from about 650,000 now, Kiselev said. Fixed-line subscribers should rise to 40 million from 38 million, he said.

State-run Svyazinvest runs Russia's seven regional operators, which are spread across 11 time zones, and OAO Rostelecom, Russia's biggest long-distance telephone company. Billionaire Vladimir Yevtushenkov's OAO Comstar United Telesystems last year paid $1.3 billion for 25 percent plus one share in the holding.

Kiselev said the company's revenue will rise 2 percent to 5 percent after a new tariff plan began Feb. 1. Under the plan, customers choose between three tariffs: providing unlimited use, per-minute payment and a combined tariff that charges extra for use over a set amount of minutes a month.

According to Svyazinvest, about 6.8 million individuals have chosen one of the three tariff plans. The majority, or 3.9 million, chose the per-minute pay.

To contact the reporter on this story: Lyubov Pronina in Moscow at lpronina@bloomberg.net.

To contact the editor responsible for this story: Lars Klemming at lklemming@bloomberg.net.


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