Operating review

Revenue structure by services1


RUB million FY 2012 FY 2011 % change,
y-o-y
Local telephony services  85,734  88,061 (3%)
Intra-zone telephony services  18,754  21,393 (12%)
DLD/ILD telephony services 20,390  24,070 (15%)
Interconnection and traffic  transit services 21,003  19,774 6%
Broadband Internet  49,797  46,396 7%
Pay TV  9,147  6,706 36%
Mobile communication services  41,161  40,660 1%
Data services (VPN, data centres, wholesale Internet sales) 20,815  18,872 10%
Rent of channels  11,269  10,365 9%
Cloud services 6,625 2,764 140%
Other  36,556  22,442 63%
Total revenue  321,251  301,494 7%

1 Effective from April 1, 2011, the methodological changes in the revenue structure include the following: 1) revenue from DLD/ILD traffic transit, which were previously included in the “DLD / ILD telephony services” reporting line, are now included in the “Interconnection and traffic transit services” reporting line; 2) revenue from mobile interconnection services, previously included in the “Interconnection and traffic transit services” reporting line, are now presented under "Mobile Communication Services"; 3) other methodological changes had no significant impact on the reporting structure

Revenue structure by customer segments


RUB million FY 2012 FY 2011 % change,
y-o-y
Residential customers  162,493   165,634 (2%)
Corporate customers  69,015  69,555 (1%)
Governmental customers  53,452  34,484 55%
Operators 36,291  31,821 14%
Total revenue 321,251  301,494 7%

Rostelecom’s revenue in 2012 reached RUB 321.3 billion, a 7% increase over 2011, achieved due to growth in cloud and IT service segments, but also from growth in revenue from providing broadband and pay-TV services.

This growth was partially offset by a decline in revenues from Domestic Long Distance and International Long Distance and intrazonal telephony services, which primarily reflected on-going changes in usage patterns for traditional fixed-line services.

Key operating indicators


Number of Subscribers (millions): FY 2012 FY 2011 % change,
y-o-y
2 Excluding traffic, generated by other telecom operators
Household passed 33.8 32.0 6%
incl FTTх 16.4 12.9 27%
Local telephony 27.1 28.5 (5%)
Mobile 13.6 13.1 4%
Broadband Internet access incl. 9.2 8.2 12%
Residential 8.5 7.6 12%
Corporate 0.7 0.6 9%
Pay TV incl. 6.6 5.9 12%
IPTV 1.4 0.7 102%
Traffic, generated by residential and corporate subscribers2
(billions of minutes)
     
Intra-zone 2.4 2.7 (11%)
DLD 1.2 1.3 (13%)
ILD 0.1 0.1 (13%)

The number of households passed grew 6% year-on-year to 33.8 million3, including 16.4 million (or 48%) passed by FTTx technology. The number of broadband subscribers grew 12% compared to the equivalent period last year, rising to 9.2 million subscribers. The subscriber base in the broadband B2C segment grew 12% to 8.5 million, out of which, those connected by FTTx technology grew 1.6 times year-on-year to 2.8 million (that is 33% of the total subscriber base), representing the highest rate of growth in the Russian market. Rostelecom’s share of the B2C broadband market was 40%.

The number of pay-TV subscribers grew 12% compared to the equivalent period last year, comprising 6.6 million subscribers. Of that total, the number of interactive TV subscribers more than doubled to 1.4 million, with the penetration optical networks making up 34%. Rostelecom’s share of the Interactive TV market was 49%.

The number of mobile subscribers grew 4% compared with the equivalent period last year, rising to 13.6 million subscribers. The acquisition of SkyLink gave Rostelecom access to 3G licenses in 69 regions across Russia. As of the date of this annual report, 3G+ networks have been built and undergone testing in 24 Russian regions, with commercial launches taken place in 10 areas.

The number of subscribers to fixed-line local telephone services decreased year-on-year, due to changes in client preference in favour of mobile means of communication, although remaining significantly lower than for international peer companies.

3 Calculated as the sum of total number of households passed by xDSL, FTTx and xPON technologies, excluding technology intersections.

History

Service