Rostelecom sees TV growth

Russian service provider Rostelecom grew its pay TV base by 7% in the year to March, taking its total to 8.1 million on an adjusted basis.  Rostelecom had 2.9 million IPTV customers at the end of March, up 24% year-on-year. 

The company’s broadband base grew by 4% on an adusted basis to 11.2 million. Fixed phone subscribers fell by 9% on an adjusted basis to 23.7 million.

Rostelecom’s TV, broadband and fixed-line numbers were affected negatively by an audit of its accounting systems, bringing the way it counts its customer base in line with an approved methodology. As a result it removed just under 30,000 pay TV customers along with 240,000 broadband customers and 180,000 fixed line customers from its count. The company said its fibre network now reached over 26 million homes.

Revenues from TV services for the quarter grew by 25% year-on-year to RUB4.581 billion (€82.6 million), while broadband revenues grew by a more modest 5% to RUB15.74 billion.

Rostelecom’s overall revenues for the quarter were RUB71.71 billion, down 11% thanks to declines in fixed telephony, VPN and non-telecom services. Operating income fell by 13% to RUB9.3 billion, thanks to factors including increased personnel costs, increased interconnect charges, mostly related to TV services, and the deconsolidation of the company’s mobile assets.

“Our first quarter results clearly demonstrate that we are delivering on our strategic objectives. Our broadband and pay TV subscriber bases continue to expand, ARPU is growing and we remain committed to developing innovative services. As a result, these rapidly growing market segments are gradually increasing their overall contribution to Rostelecom’s revenue, which already accounts for 37%,” said Sergey Kalugin, Rostelecom president.

“Despite the promising growth of the digital segments, the high comparison base caused by one-off income gained during the Sochi Winter Olympics in the first quarter of 2014 meant that we were unable to increase revenues in nominal terms this quarter. We are pleased to have achieved a solid OIBDA margin and that our efforts to curb the rise in financial expenses have paid off, despite the increase in the market cost of borrowing and volatility in the capital markets. As reflected by our first quarter results, we are consistently achieving the goals set out in our five-year strategic plan. We remain on track to fulfilling our strategic objectives and we look forward to seeing the Company’s continued growth.”