Tele2 and OJSC Rostelecom have completed the second stage of the deal for Rostelecom's mobile assets integration and legal finalization of creating a new federal mobile operator, Tele2 informed.
Rostelecom contributed 100% of CJSC RT Mobile shares to the new federal operator based on Tele2. RT Mobile holds a wide range of 2G/3G licenses and a federal license for 4G spectrum.
The first stage of the deal was closed on March 28, 2014. Then Tele2 got Rostelecom's seven mobile subsidiaries: SkyLink, Nizhniy Novgorod Mobile Networks, Baykalvestkom, BIT, Volgograd GSM, Enisey Telecom and AKOS.
Shareholders of the new federal operator are VTB Group, SOGAZ Insurance Group, Aleksey Mordashov's entities (55%) and Rostelecom (45%).
After closing the deal's second stage, Tele2 started providing services in over 60 Russian regions. It also got control over 2G/3G licenses in all federal districts and a license for 4G spectrum on the entire Russian territory.
Tele2 is currently introducing its business processes in Rostelecom assets and correlating new business units with its organizational model. The rebranding of subsidiary companies is yet to be held.
The operator will use a wide range of licenses to enter new markets, improve the quality of the network in Tele2-penetrated regions, and increase a range of services, including a launch of high-speed mobile Internet.
"We are witnessing a milestone event in Russia's telecommunications industry – setting up a new federal operator on the Tele2 basis. Creation of a new bellwether working on an all-Russian scale will seriously change the balance of forces on the market. It will boost competition and make mobile service more affordable for subscribers. Tele2 will continue using its unique business model proved to be efficient over ten years. The operator's strategy over the next few years implies fast development – rolling out new networks and upgrading existing ones to provide federal-scale coverage with a full range of modern mobile services," said Tele2 CEO Mikhail Noskov commenting on the deal.
OJSC Rostelecom (tax number: 7707049388) is the national long-distance communication operator leading in the amount of long-distance domestic and international data traffic and operating the land-line network of television and broadcasting channels. In April 2011, Rostelecom absorbed interregional communication companies Centertelecom, Sibirtelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, SZT, YTK and Dagsvyazinform. Total length of Rostelecom's backbone network all over Russia is about 500,000 km. The company's infrastructure reaches 43 million Russian households.
The company's authorized capital is RUB 7.965 million represented by 2,943,258,269 common and 242,831,469 preferred shares at par value of RUB 0.0025.
Rostelecom's major shareholder is the government. Rostelecom's securities are traded on the MICEX Stock Exchange in Russia as well as in the electronic OTC trading system OTCQX in the USA.
IFRS net profit of Rostelecom for Q1 2014 grew by 8% to RUB 6.9 billion from RUB 6.413 billion the year before. Revenue was RUB 80.406 billion increasing by 1% from RUB 79.559 billion. Revenue from continuing operations (fixed-line business) grew by 4% to RUB 73.2 billion. OIBDA increased by 10% year-on-year to RUB 26.5 billion from RUB 29.4 billion. OIBDA margin was 33% compared with 37% in the first quarter of 2013.
According to the DataCapital information retrieval system, RAS net profit of OJSC Rostelecom for Q1 2014 grew by 45% to RUB 11.082 billion from RUB 7.64 billion the year before. Revenue increased by 8.21% to RUB 73.304 billion from RUB 67.744 million, GP and sales profit decreased by 15.86% to RUB 11.182 billion from RUB 13.291 billion. Pre-tax profit went up 23% to RUB 11.798 billion from RUB 9.599 billion.
Tele2 is an alternative telecommunication company operating in Russia since 2003.
In 2013, Tele2's revenue from operations grew by 10% year-on-year to RUB 65.3 billion from RUB 59.5 billion. EBITDA increased by 12% year-on-year to RUB 24.2 billion. EBITDA margin was 37.1%, 0.6 p.p. more than in 2012. In 2013, the total investment in the IT infrastructure and technical development of the company's network reached RUB 5.9 billion.