Purposes for Reorganization

Rostelecom reorganization by way of CJSC “RT-Mobile” spin-off is aimed at improving efficiency of Rostelecom mobile operations and expected to become a major step in growing further Rostelecom mobile business.

Currently mobile business accounts for an insignificant share in Rostelecom general business. Spinning it off as a separate company will enable:

  1. to maximize top priority tasks by focusing on developing mobile business only,
  2. to improve speed of implementation of a unified strategy in the mobile segment and operating efficiency of mobile assets usage;
  3. to simplify mobile assets management organization of Rostelecom.

The Company`s further strategy of mobile operations implies a merge of Rostelecom`s cellular assets into a joint venture with Tele2 Russia. The joint venture 2-RTK holding will bring substantial benefits to both parties, as well as to consumers and the entire Russian telecom sector, including:

  • T2 RTK Holding will have immediate nation-wide reach and sufficient scale to effectively compete with existing mobile operators
  • The combination of mobile assets will allow T2 RTK Holding to capture the imminent data growth opportunity in the Russian telecoms market by capitalising on Tele2 Russia’s know-how and impressive track record in developing mobile operations and on Rostelecom’s wide next-generation spectrum holdings
  • T2 RTK Holding will command superior cash flow generation potential, to the extent the combination is expected to generate significant synergies over the medium term, particularly in respect of network roll-out and operation, distribution and customer service
  • T2 RTK Holding will be able to offer converged fixed-mobile products across the country
  • Rostelecom will additionally benefit from substantial savings of mobile capital expenditures and elimination of debt related to mobile operations albeit facing relatively minor negative impact on top line

The detailed information regarding CJSC “RT-Mobile” spin-off is available here.