Rostelecom Sees Earnings Jump, Sales Decline

Former long-distance monopoly Rostelecom saw its first-half earnings quadruple on the sale of its stake in a fixed-line provider, but sales declined as it struggled to maintain its market share.

Rostelecom, which is controlled by state telecoms holding company Svyazinvest, said in a statement that net profit rose to 9.83 billion rubles ($349.9 million) from 2.55 billion rubles in the first half of last year.

The company sold its 11 percent stake in fixed-line operator Golden Telecom to mobile carrier VimpelCom at the beginning of 2008 for around $465 million.

Revenues, to International Financial Reporting Standards, declined 1.1 percent on the year to 31.4 billion rubles as core revenues from long-distance traffic transit fell 6.7 percent.

Revenues from leasing trunk lines to other operators edged up 0.8 percent, while sales of new and value-added services such as Internet access soared 45 percent to 4.16 billion rubles, the company said.

Operating expenses fell 5.7 percent to 27.16 billion rubles. Operating income before depreciation and amortization rose 14 percent to 7.85 billion rubles, and the OIBDA margin improved to 25 percent from 21.7 percent a year ago.

Rostelecom lost its monopoly on long-distance phone calls in 2006 as part of the sector's liberalization.

Since then, more than 30 operators have received licenses to provide domestic and international long-distance calls.