Rostelecom Completes Deal to Create a JV with Tele2 Russia



Moscow, Russia – August 6, 2014 – Rostelecom OJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that it has completed the second and final stage of the deal to create a new national mobile operator (hereinafter “JV”).

As a result of completing the final stage of the deal, Rostelecom has transferred 100% of its shares in its subsidiary CJSC RT-Mobile to the JV. As part of the deal, Rostelecom spun off its integrated mobile assets into RT-Mobile and had its licences reissued to this entity. After incorporating the relevant amendments into the JV’s charter, Rostelecom will have a 45% stake in the JV’s share capital.

During the first stage of the deal, which was completed on March 28, 2014, Rostelecom transferred its shares in Sky Link and its other mobile subsidiaries to the JV, along with the assets of its “start-up regions”, including Moscow and St Petersburg.

By forming a JV and bringing their mobile assets together, Rostelecom and Tele2 Russia have created a national mobile operator present in 64 Russian regions that owns a wide range of licences and spectrums across Russia, including for 3G and LTE services. The new operator has more than 38 million subscribers and a 16% share of the Russian mobile market1.

Sergey Kalugin, President of Rostelecom commented: “The creation of this JV is a major milestone in the implementation of Rostelecom’s mobile strategy. By possessing a stake in a large and fast-growing mobile operator, we significantly strengthen our presence in Russia’s rapidly developing mobile data market, enabling us to successfully compete with other market players.

We have completed our deal to create a mobile JV several months ahead of schedule. This reflects how all of the JV’s shareholders are committed to focusing on the operations of the newly created national mobile player as soon as possible. Our priority now is to integrate the businesses, and finalise the JV’s strategy and business plan. The fact that we were able to finalise this complex deal ahead of schedule leaves us feeling both optimistic and confident that the JV will follow the same pace in strengthening its competitive position, increasing its subscriber base, enhancing top-line growth and delivering additional shareholder value.”

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For more information please visit or contact:

“Rostelecom Investor Relations / Rostelecom IR” application is now available to download for free from the Apple App Store and Google Play

Investor Relations Department

Tel. +7 (499) 995 97 80

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Rostelecom ( is one of the largest national telecommunications operators in Russia and Europe. The Group operates in all segments of the telecommunications market and covers more than 34 million households.

Rostelecom is an undisputable leader of the broadband and pay-TV markets in Russia with over 10.8 million fixed-line broadband subscribers and over 7.6 million pay-TV subscribers.

The Group generated RUB 80.4 billion of consolidated revenues, RUB 26.5 billion of OIBDA (33.0% of revenues) and RUB 6.9 billion of net income for the first three months ended March 31, 2014.

The Group is a market leader in providing telecommunications services to government bodies and corporates of all levels. It is also an important innovator that provides solutions in the field of medicine, E-Government, cloud computing, education, security and housing & utility services.

Rostelecom was assigned ‘BBB-’ and ‘BB+’ international credit ratings by Fitch Ratings and Standard & Poor’s respectively.

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Certain statements in this press release are forward-looking statements within the meaning of the U.S. federal securities laws and are intended to be covered by the safe harbors created thereby.

Those forward-looking statements include, but are not limited to:

  • Management’s assessment of the Company’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
  • the Company’s anticipated capital expenditures and plans to construct and modernize its network;
  • the Company’s expectations as to the growth in demand for its services, plans relating to the expansion of the range of its services and their pricing;
  • the Company’s plans with respect to improving its corporate governance practices;
  • the Company’s expectations as to its position in the telecommunications market and the development of the market segments within which the Company operates;
  • economic outlook and industry trends;
  • the Company’s expectations as to the regulation of the Russian telecommunications industry and assessment of impact of regulatory initiatives on the Company’s activity;
  • other statements regarding matters that are not historical facts.

Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:

  • risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
  • risks relating to Russian legislation, regulation and taxation, including laws, regulations, decrees and decisions governing the Russian telecommunications industry, securities industry as well as currency and exchange controls relating to Russian entities and their official interpretation by regulatory bodies;
  • risks relating to the Company, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Company’s services including their promotions, and the ability of the Company to remain competitive in a liberalized telecommunications market;
  • technological risks associated with the functioning and development of the telecommunications infrastructure, technological innovations as well as the convergence of technologies;
  • other risks and uncertainties. For a more detailed discussion of these and other factors, see the Company’s Annual Report and the Company’s other public filings.

Many of these factors are beyond the Company’s ability to control or predict. Given these and other uncertainties, readers are cautioned not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements (which are made as of the date hereof) to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.

1 ACM-consulting estimates based on Q1 2014 data

Short Name: Rostelecom OJSC
Category Code: MSC
Sequence Number: 427836
Time of Receipt (offset from UTC): 20140806T071759+0100


Rostelecom OJSC


Rostelecom OJSC