Rostelecom implemented a client evaluation scoring system

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February 27, 2017, Moscow – Rostelecom PJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY) announces that it has completed the first stage of implementing a credit scoring system designed to promptly assess customers’ credit risk.

The scoring system considers factors spanning the entire credit management cycle, including customer counterparty relationships from contract signing through to its expiration. The system makes decisions based on statistically sound information provided by intelligent Big Data analysis.

An analysis of the information accumulated by the system will assess the probability of payments being delayed and other associated risks.

The first implementation stage saw the creation of a system that will evaluate international operators’ credit risk (B2O segment). This allows the Company to assess non-resident telecom provider risk and calculate their credit limit according to Rostelecom’s policy. The system also continuously monitors operators’ creditworthiness (including timely notification of any changes) through integrated gateways to external data sources, i.e. credit agencies that provide financial and customer information.

The introduction of the credit scoring management system has already had a positive impact on OIBDA thanks to a RUB 224mn decrease in international operators’ bad debt reserves.

Kai-Uwe Mehlhorn, Senior Vice President and Chief Financial Officer of Rostelecom PJSC commented:
“The introduction of a scoring system brings a number of positive effects for the Company in terms of increasing operational efficiency. The system is increasing receivable collection rates, it provides a differentiated approach to dealing with clients’ debts, it takes into account various risk evaluation criteria, and it decreases the cost of collection. The system also decreases bad debt reserves, which positively affects the Company’s OIBDA.
In addition to improving internal efficiency, the scoring system has great potential to increase the Company’s revenue through further data monetisation, with the possibility to enlarge its digital services offering.”

The embedded architectural solutions of the scoring system are resistant to hardware and software errors and failures with the ability to restore themselves should they occur.

By the end of 2017, the system will be able to score credit risk across all sectors (B2B/ B2G, B2O, B2C) and macro-regional branches of Rostelecom will be automated.

As a result of an open tender procedure the software solution for the credit scoring system will be managed by SAS. AT Service will become partner for the embedded scoring systems.