Rostelecom sets strategy targets for 2025

21 Apr 2021

Russian telecoms giant Rostelecom’s management have presented a development strategy for 2021-2025, aiming for ‘smart growth’ of its traditional fixed line business to deliver increased return on investment and cash flow, customer base growth ‘to over 100 million in the retail (B2C) segment’, while maintaining leadership positions in the operator segment and the status of ‘number one choice’ for business and government clients.

Specific targets were presented, including:

• ensuring ‘number one’ competitive position in selected areas including data centre and cloud services, information security, digital medicine, digital regions, state digital services

• attracting strategic partners and public capital to individual businesses through the IPO mechanism

• 25% share in revenue from ‘clusters [see below] and new digital products’

• increasing efficiency via cost optimisation in traditional business

• improvement of the OIBDA [operating income before depreciation and amortisation] margin to >40% in five years via internal efficiency improvements and containing operating cost growth

• further development of relations with the state in implementation of projects and programmes, the development of digital infrastructure and solutions, and the digitalisation of key processes.

To implement its strategy, Rostelecom says it will ‘move to a segment-cluster development model’. Traditional customer segments will be complemented by separate high-growth clusters including data centres & cloud services, information security, digital medicine, digital regions, and government digital services.

Successful implementation of initiatives within the strategy framework will enable Rostelecom in 2025 to:

• increase revenue to over RUB700 billion (USD9.14 billion)

• increase OIBDA 1.5 times

• increase net profit two-fold

• reach a target level of debt burden in terms of net debt/OIBDA of <2.5x

• ensure value of CAPEX in absolute terms at the level of 2020.

Russia, Rostelecom