OREANDA-NEWS. November 16, 2007. Uralsvyazinform (RTS and MICEX: URSI/URSIP, ADR: UVYZY/UVYZYP) presented unaudited unconsolidated operating and financials results for January-September 2007 according to Russian Accounting Standards.

ralsvyazinform CEO Anatoly Ufimkin had the following to say: “It just so happens that the last day of the third quarter is the anniversary of our regional telecom operator. This year we celebrated our fifth birthday. Consolidated efforts, opportunities and resources of the seven previously independent regional operators gave a shot in the arm to the company’s development. Five years ago we had 2,952,000 fixed-line and a mere 445,000 cellular users, while at present these metrics stand at 3,687,000 and 4,843,000, respectively. The company got off to a strong start on the mass broadband access market: 17,000 users in early 2006 and 236,000 users today. Finally, 5 years ago the company’s market value amounted to $480 mln and $2,402 mln now. Overall, 9M07 results underscore the company’s ongoing dynamic development. The bulk of incremental revenue is generated by VAS (59%): cellular business (39%) and datacom (20%). Concurrently, payrolls and social expenses are reduced (-5.8%). As a result of management’s efforts to enhance efficiency, net profit surged 38%.”

In January-September 2007 revenue from GSM-900/1800 wireless communications (the Utel brand) expanded 22.2% y-o-y to Rub 9,075.0 mln due to:

- a 13.9% increase to 4,843,300 users;

- a 11.8% rise in ARPU (average monthly revenue per user) in January-September 2007 to Rub 246 (Rub 220 in the same period 2006).

In January-September 2007 revenue from local voice firmed 4.6% to Rub 7,785.50 mln, which is attributable to:

- introduction of new tariffs and tariff plans for local voice on February 1, 2007; revenue from leasing user lines and local voice grew 10.8% to Rub 6,776.20 mln.

- a 36,000 rise in main telephone lines to 3,686,900 numbers (up 1.0% on 9M06).

- a 24.1% decline in revenue from connecting main telephone lines to Rub 1,009.20 mln (a decrease in new connections, a contraction in connection tariff since February 1, 2007, a reduction in VAS revenue as a result of amendments made to the statutory framework).

In January-September 2007 revenue from telecom operator services rose 7.9% to Rub 4,200.80 mln due to:

-          introduction of new interconnect rules imposed by federal communications watchdog Rossvyaznadzor in June 2006

-          a decrease in compensatory surcharge for LD and ILD operators on February 1, 2007 (as part of package tariff changes).


In January-September 1007 intrazonal voice revenue advanced 46.4% to Rub 3,535.20 mln as a result of:

-          introduction of the Calling Party Pays (CPP) principle on July 1, 2006, which provides for classifying fixed-line calls to mobile numbers as intrazonal voice (1,327.70 mln min in H107);

-          a 15.2% decline in outgoing intrazonal voice from fixed-line users to fixed-line users (459.60 mln minutes in H107).

In January-September 2007 VAS revenue (broadband and dial-up internet access, datacom, Intellectual network services, etc.) climbed 56.3% to Rub 2,381.80 mln thanks to: 

-          a 3.3x rise in datacom to 1,970.30 TB;

-          a 3.8x increase in connected ADSL ports to 235,500 from 61,700 ports as of September 30, 2006

-          a 17.0% decline in dial-up Internet access to 1,377.90 mln min.