Rostelecom poised to swoop for two ISPs

29 Sep 2011

According to two separate reports by Kommersant, Russian national operator Rostelecom is preparing bids for a pair of regional internet service providers (ISPs). The acquisition of Moscow-based Gorcom, which is wholly owned by CEO Oleg Zaporozhets, would allow Rostelecom to control 7% of the Moscow high speed internet market; the broadband provider is valued at between RUB1.2 billion and RUB1.4 billion (USD37.8 million and USD44 million). Gorcom anticipates that it will generate annual revenues of around RUB450 million during 2011.

Meanwhile, Urals-based cableco Yugratel is expected to go under the hammer in an auction slated to take place in November/December this year. The company’s current owners, the local authorities in the Khanty-Mansiysk Autonomous District (72.13%) and the nearby city of Surgut (27.87%), have reportedly stipulated a starting price of RUB2.145 billion for the sought-after unit. The self-styled ‘Big Three’ mobile operators Mobile TeleSystems (MTS), Vimpelcom and MegaFon have all confirmed their interest in participating in the auction, but Rostelecom is regarded as the favourite to snag the cableco. Both potential deals are effectively a continuation of Rostelecom’s strategy to strengthen market positions in regions where it has a limited presence, following the completion of its so-called ‘mega-regional merger’ on 1 April 2011; the tie-up saw the company absorb the operations of seven regional subsidiaries affiliated to parent company Svyazinvest.

Russia, Rostelecom