Telecoms Ministry still questioning Rostelecom strategy
MOSCOW. Jan 16 (Interfax) - The Russian Telecoms Ministry is still questioning the efficiency of the Rostelecom strategy and has not yet received the government telecom company's investment program for 2013, Telecoms Minister Nikolai Nikiforov told the press.
"The strategy committee held its meeting. All the [news] headlines said the questions had been dealt with. In actual fact one of the key conclusions was that there was still not enough information to evaluate efficiency," the minister said.
"So we cannot say that the matter is finalized," Nikiforov said. "On the one hand it is good that there is dialogue, but on the other there is not enough information to make a decision," he added.
The Telecoms Ministry has not yet received the Rostelecom investment program for 2013. "This information has not yet been sent. We are waiting. This is a new procedure so everything is being confused within the regulations," Nikiforov said.
The Rostelecom board on December 26 confirmed a five-year strategy for 2013-2017 and an investment program for 2013.
Russian Prime Minister in November 2012 instructed executive authorities to approve investment programs for natural monopoly companies, which includes Rostelecom. However, the instruction did not say which specific body had to approve the investment programs.
The Telecoms Ministry after a new minister was appointed in May 2012 has often said that it considers the most efficient area of development for Rostelecom to be fixed broadband access. The Telecoms Ministry is concerned about the efficiency of Rostelecom investment in 3G base stations, considering that construction is being carried out in regions where the market is already occupied by other players. "We think the estimated return on these investments is too high," the minister said in December.
The money Rostelecom spent on building 3G base stations - around 70 billion rubles, could have been more efficiently spent, in terms of the country's interests, on developing broadband, the Telecoms Minister reckons.
The minister added that investment planning is a rather complex process and now one decision cannot cancel Rostelecom's 3G network construction. Now it is important to complete these projects on time.
Rostelecom is building 3G networks in 27 regions, most of which already offer GSM services. The 3G network is officially launched by Sky Link, which is wholly owned by Rostelecom, which holds licenses and frequencies for 3G in the 1.9 Ghz-2.1 Ghz range in 69 regions.
Rostelecom's approved five-year strategy says the company will earmark 60% of investment over the next five years for broadband internet development.
An additional 24% of investment in 2013-2017 will go to cellular services (the current strategy for 2011-2015 presumes earmarking 25% of total investment for cellular services).
The average ratio of capex to sales is targeted at 14% in 2013-2017, largely due to the completion of the installation of IT systems and passing the peak of investment in innovative development after 2014.
The strategy for 2011-2015 provided for a capex/sales ratio of 20% for the period. The national telecoms company invested 82.4 billion rubles in 2011, which amounted to 28% of sales. In the first nine months of 2012, capex totaled 63.5 billion rubles, or 26.6% of sales.
Rostelecom plans to main OIBDA at 39% in the period to 2017. The target for the period to 2015 was 40%. OIBDA was 39.4% in the first nine months of 2012.
Average annual sales growth is targeted at 6% or slightly higher in the period to 2017, which is in line with anticipated market growth. The strategy for 2011-2015 targeted growth of 6-10%.
