Central Telegraph sees revenue drop 11% but earns record OIBDA in 2013
MOSCOW. Feb 4 (Interfax) - Central Telegraph (CT) , a fixed telecom and broadband provider in the Moscow region that is controlled by national operator Rostelecom , saw its revenue to Russian Accounting Standards drop 11% to 3.4 billion rubles in 2013, CT chief executive Rodion Levochka, citing preliminary figures, told reporters.
However, the company's profitability rose to a record level. OIBDA (operating income before depreciation and amortization) grew 18% to 930 million rubles and net profit more than quintupled to 290 million rubles.
Revenue fell due to a drop in income from low-margin inter-operator services, which shrank to 37% of total revenue from 42%. Revenue from broadband Internet services and IPTV services grew 4% and 8.6% respectively.
The company had 133,800 broadband subscribers at the end of 2013, including 15,500 subscribers who also use IPTV services. The company acquired 25,000 new subscribers in 2013 and plans to acquire 35,000 in 2014, Levochka said.
CT's average monthly revenue per user (ARPU) in its broadband business was 370-380 rubles, which is in line with the average on the Moscow market, he said.
CT expects revenue to grow 5% in 2014 and OIBDA to top 1 billion rubles. The company intends to reduce its net debt/OIBDA ratio to 1 from 2.3, Levochka said.
CT expects revenue in the broadband business to grow 20%, he said.
The transfer of CT's B2C broadband subscriber base to Rostelecom, which had been planned earlier, will not take place this year as the companies could not find mutually beneficial parameters for a deal. Merging CT into Rostelecom or switching to the parent company's brand is also not on the agenda, Levochka said.
However, in the middle of this year CT will transfer its IPTV subscribers to Rostelecom's technology platform. The companies are also coordinating network construction and investment policy, Levochka said.
CT had planned to hand over part its retail broadband Internet business to Rostelecom and focus on services for small and medium businesses. This segment remains a priority for the company, and in order to improve its image with small and medium businesses CT is considering opening co-working centers at its central office on Tverskaya Street in Moscow, in Zelenograd and Krasnogorsk, Levochka said.
Negotiations on participation in the project are being held with city government institution Small Business Moscow, he said. "We see this as an image project," Levochka said, adding that CT could expand the creation of co-working centers if this business turns out to be more profitable than leasing space.
CT provides fixed telecom, broadband access, IPTV and documentary telecom services in the Moscow region based on its own 4,800-km multiservice network. CT has capacity for 420,000 numbers in the ABC area codes of 495, 499 and 498, and 10,000 numbers in the DEF code (mobile services) of 958.
Rostelecom owns 60% of CT's equity and 80% of voting stock. A major minority shareholder is LLC Trust Brokerage Company (TBK) with 10.59% equity interest and 8.44% of voting shares. The minority shareholder is represented on the board of directors by Dmitry Pankov, CEO of LLC Delo Center, a division of Sergei Shishkarev's Delo Group.
