Technological leadership in IP networks Fibre network rollout and increase capacity of backbone and regional network

Alexander Tseitlin

Senior Vice-President, Network Maintenance

We are planning to upgrade our last mile copper networks to fibre optic lines and increase the capacity of Rostelecom’s backbone infrastructure across the country. We are investing heavily in our networks to provide our subscribers with a full range of world class network services, and reinforce Rostelecom’s technical leadership across Russia.

Our aim is to have up to 33 mln households passed with fibre optic lines within a couple of years, and build a network capable of providing each of our clients with network speeds of 1 Gb/s.

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Differentiated offerings Focus on development of unique content offering and acceleration of development of new products

Larisa Tkachuk

Senior Vice President – Commercial Director

The strength of Rostelecom’s infrastructure enables us to offer customers a diverse range of bundled services in the form of double, triple and even quadruple play offerings, each tailored to customers’ needs with unique content propositions.

Not content with offering our subscribers the best of traditional fixed services, we are also looking to complement our offering by prioritizing the development of new solutions including financial services, clouds, online and mobile commerce, smart house etc. This will enables us to reduce churn and increase revenue per household.

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Best-in-class customer service Modernisation of customer service platform and upgrade to unified OSS/BSS systems

Sergey Kalugin

President of Rostelecom

One of our key strategic goals is to ensure that the Company`s level of customer service matches international best practice. To accomplish this, we are increasing the scope of our Service Level Agreements, we are implementing an intuitive online multiplatform self-service web-interface to help customers solve problems more efficiently, and we are improving 2nd and 3rd line support services, where staff resource becomes much more valuable to the customer. When this has been implemented, Rostelecom will truly be a market leader with best-in-class customer service.

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Organisational transformation Transformation of corporate and organisational structure

Galina Rysakova

Senior Vice President of Organizational Development and Human Resources

The Company`s organizational structure has been streamlined by centralizing key support functions. However, this has not prevented us from sharing responsibilities fairly between Rostelecom’s headquarters and our regional branches. This key change in the structure of our organization has helped us deliver on our strategy at a high level without compromising on our desire to maximise efficiency.

As part of this effort, we launched a pilot project in our Voronezh branch to establish an ‘Ideal branch’ which has a well-developed operational model which will then be replicated at other regional branches. We are also reshaping our corporate culture, where individual employees have the opportunity to take much higher levels of personal responsibility, which will see individual contribution be reflected in his or her remuneration.

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Efficiency increase Capex optimisation with strong focus on return on investment and productivity increase

Kai–Uwe Mehlhorn

Senior Vice President and CFO

We are improving internal efficiency by optimizing CAPEX and maximizing returns on investments. Furthermore, where there is room to realize additional savings on operational expenditure, we are ensuring that such efficiencies are being followed through.

As part of this process, we have been participating in an independent Global Telecom Cost Benchmarking Project with AT Kearney, which highlighted areas where further improvements are required. So, we are bridging the gap between ourselves and best in class peers in terms of efficiency. Not only that, our strategic initiatives are reaping their first positive results - in 2013, we realized more than RUB 16 billion by improving our tender procedures and relationships with suppliers.

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