OREANDA-NEWS. On June 18, 2007 ZAO TransTeleCom Company (TTC) summed up the results of its activities for 2006 using International Financial reporting Standards (IFRS). The consolidated revenue of the TTC group of companies consisting of the parent Company and 18 enterprises came up to 17,8 billion rubles, reported the press-centre of TransTeleCom. 

This is 21 per cent more than in 2005 when the Company earned 14,7 billion rubles. Revenues related to the telecommunications services which make up two thirds in the structure of the Company’s revenues amounted to 12,7 billion rubles so that 2005 indicators were surpassed by 29 per cent (9,8 billion rubles).

The profit for 2006 was 2,2 billion rubles exceeding last year’s figure by 46 per cent (1,5 billion rubles). The profitability of the Company’s activities went up in the last three years from 6 to 18 per cent. The rise of this factor is mainly related to the profitability rate of the telecommunications business.

In 2006, the Company created a sound basis and a sizeable potential for the further expansion of its business. Modern services are being developed and implemented; the Company is entering new segments of the Russian telecommunication market; the capacity and the reliability of the network is constantly expanding.

The digital backbone communication network serviced by the Company was providing a reliable, secure and effective data exchange offering high-quality telecommunications services to Company’s clients and to its stockholder (OAO Russian Railways). Channel availability for telecommunication channels provided for technological needs of the OAO Russian Railways subdivisions was rated at 99,999 per cent.

One of the business priorities in 2006 was the intensification of the international business of the Company. Foreign networks infrastructure in Europe and Asia was modernized; most important strategic partnership contracts were signed with a number of foreign operators, including NTT Communications and British Telecommunications (BT). In 2007 the Company plans to complete important projects of laying two undersea cable systems: one connecting the Sakhalin Island with the mainland and the other connecting Russian and Japanese networks.

In the Russian telecommunications market, the TTC has secured its leading position with regard to all main types of services. The number of Company’s clients has reached 1490, and the number of network connections to the digital backbone telecommunication network is coming close to 13 thousand.

Client traffic in Company networks has experienced a steady growth. Annual volume for Internet traffic has more than doubled and came up to 6,724,247 GB. IP VPN traffic (244,844 GB) also more than doubled in 2006.

In 2006, the Company continued the expansion of its new telecommunications network based of the cutting-edge Dense Wavelength-Division Multiplexing (DWDM) technology, and it put into operation two new sections in the southern and far-eastern directions, with the total length of over 6 thousand kilometers. Over 1 thousand km of fiber-optic telecommunication links were installed.

In 2006, the Company completed setting up the networks structure in order to be able to provide long-distance (intercity and international) communication services as well as to enter the retail market. In 2006, permits were received for operating long-distance telephone network exchanges and for using all structures established in all constituent territories of the Russian Federation for the purpose of organizing zone operators’ connects to ZAO TransTeleCom Company networks.

The volume of capital investment in 2006 amounted to 1,9 billion rubles, and the total capital investment in 2004-2006 was, in terms of service initiation, as high as 3,908 billion rubles. In 2006, the ZAO TransTeleCom Company investment projects were financed using proprietary funds, without attracting outside credit funds.

In 2004, the Company received for the first time Corporate Governance Score from an international rating agency. In 2006, the Standard & Poor’s corporate governance score was confirmed at the Global Scale CGS level of 4 and was raised to 4,2 under the Russian national scale CGS. In the opinion of Standard & Poor’s analysts, “…within the limits of its competence, the TransTeleCom management shows its readiness to adjust its policy of information disclosure and its internal company structure bringing them in line with the practices of transparent public companies.”

Recognizing its corporate social responsibilities, TransTeleCom declared as its aim for 2006 the start of realizing TransTeleCom Children’s Hearts, a long-term charity program for 2006-2010. Its goal is providing assistance to children with grave cardiovascular conditions from poor families. Within the framework of the TransTeleCom Children’s Hearts program, the Company transferred 6,703,208 rubles to a special fund, and workers from the ТТС Company group made personal contributions amounting to 659,465 rubles.

The ТТС financed 45 operations for children with the congenital heart disease. The ТТС also financed four specialized trips for heart surgeons to Kabardino-Balkariya, Chuvash Republic, the Karachay-Cherkessiya, and Vologda where these medical specialists examined one thousand children. Our Company paid for most urgent operations. Regional ТТС enterprises actively took part in this program, organizing special events in orphanages and in cardiovascular units of local medical centers.

In 2007, one of the main strategic aims of ТТС development will be entering the long-distance services market as well as implementing the Company’s capabilities in providing various Internet services. That would allow to increase the number of telecommunications market segments, in which TransTeleCom Company has the right to claim lead positions. That would also help the Company increase its capitalization many times over.

Aiming to strengthen its positions in the Eurasian transit market, the Company will continue expanding its presence in strategic areas, mostly in the southern and in the eastern directions.
To provide for active development of telecommunications business and for more effective network use, the Company has started a program of technical re-equipment and building new facilities. This program includes both new projects and existing continued business projects from previous years.