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. Last Updated: 07/27/2016

Sistema Telekom Enters High-Speed Net Market

Touting the same kind of price-war tactics that brought waves of new users to its cellular subsidiary MTS, Sistema Telekom launched its new Internet strategy this week by putting cheap new broadband Internet access services on the market.

After weeks of teasing Muscovites with billboards asking passersby "What is Dot Ru?," city telephone network MGTS, a majority-owned Sistema subsidiary, and its daughter company, PTT Teleport, gave their answer: Dot Ru, or ???™† ??, is the new brand name under which they will market Internet access via ADSL, or asymmetrical digital subscriber lines.

That is the first part of the powerful telecoms holding's new two-pronged advance on the growing Internet market, said Sistema officials Friday at a press conference. They also declared their intention to lure clients with content, but declined to give details.

Sistema now offers MTS and its new mobile Internet strategy, three Internet service providers that claim a significant chunk of Moscow subscribers, trunk access and traditional consumer and corporate voice-transmission services.

The announcements are a sign that the holding is seeking to consolidate its technologies and subscriber base into a Russian Internet giant along the lines of America Online.

The first step is to capture subscribers with cheap access, a strategy used by Golden Telecom's consolidated ISPs earlier this year to win a year-on-year five-fold increase in its subscriber base to 33,644 clients.

Golden Telecom, owner of leading dial-up provider Russia On-Line, fired back Friday with an announcement that it was ready to install $5 million of modem-pool upgrades recently purchased from Lucent Technologies.

The upgrades should provide faster and more stable dial-up access, said Clifford Gauntlett, director of Internet services division at Golden Telecom, on Friday in a telephone interview.

Gauntlett, whose division appears to be pursuing a portal-building strategy, welcomed the new competition from Sistema, saying it would help shift Internet business from access services to online services.

"We think the expansion of access on this market [means] more people will be on the net, and more people will be using portals," he said.

For the ADSL services, which uses the regular copper wire that connects apartments and offices to the MGTS network, PTT Teleport is charging $150 a month for up to 800 megabytes of incoming data, a fee Gauntlett said was "competitive."

PTT director Dmitry Kostachyov said that within two months the company will begin to scale back the fee as the subscriber base grows. The installation fee for a specialized modem and a switch to shunt data to the modem is $750. Kostachyov added that ADSL access could be split between several users in one building.

ADSL service allows subscribers uninterrupted "always on" Internet access at downstream transmission speeds of up to 8 megabytes per second.

The switch, installed over a phone jack, separates date from voice traffic so that calls can be received even while data is coming over the line.