Sistema reorganises telecoms business

5 Jul 2007

The board of directors of Russian conglomerate Sistema has approved a plan for the reorganisation of the company’s corporate structure, under which Sistema Telecom will become an operating division of Sistema and will be renamed as the Telecommunications Asset Management division. The unit will include the group’s technology policy and strategic planning departments. In addition, a new division has been created to manage and develop Sistema’s unlisted assets. Separately, the Science & Innovations division will be transformed into the Innovations & Ventures division, with broader responsibility for the development of new businesses. The board announced that the combined payroll of Sistema and Sistema Telecom will be reduced by approximately a third as a result of the reorganisation.

Sistema controls Russia’s largest mobile operator Mobile TeleSystems (MTS), which had over 75 million subscribers in Russia and CIS countries by the end of 2006. Sistema’s fixed line division Comstar United TeleSystems (Comstar UTS) was formed from the merger of three fixed line operators — ZAO Comstar, MTU-Inform and Telmos — in May 2004. At the end of 2005 Sistema reorganised its telephony assets, bringing another of its operators — Moscow City Telephone Network (MGTS) — under the Comstar umbrella. The enlarged entity is the leading non-government telco in Russia’s wireline sector and is the largest fixed line and broadband operator in the Moscow region. According to TeleGeography’s GlobalComms database it had 3.64 million fixed line subscribers at the end of 2006, and 412,000 ADSL broadband subscribers by the end of March 2007.