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. Last Updated: 07/27/2016

Positioning MTU-Intel for Internet Explosion

VedomostiRepin says MTU-Intel is concentrating its resources to prepare for future expansion.
In mid-September, AFK Sistema announced the hotly anticipated merger of two of its subsidiaries -- MTU-Intel and PTT-Teleport Moscow. Both companies were leaders in their respective Internet markets -- MTU-Intel in the area of dial-up accessing and PTT-Teleport Moscow in the area of dedicated-line access.

The new company has retained the name MTU-Intel and has, according to its director, Nikolai Repin, plans to expand its services. For example, MTU-Intel subscribers will soon be the first in Russia to have "global roaming" capabilities on the Internet.

Q: What motivated Sistema to unite two completely different Internet companies -- MTU-Intel and PTT-Teleport Moscow? After all, both companies were successful and occupied strong places on the market.
A: The merger was dictated by the desire to concentrate resources in order to develop one of the corporation's strategic directions. MTU-Intel will be Sistema's main company on the Internet market.

MTU-Intel now services 300,000 dial-up subscribers. At the start of next year, when the technical infrastructure is in place to provide Tochka.Ru services [digital lines for homes and businesses], we're hoping for an explosive increase in the Russian subscriber base and in the area of fixed-line access. The number of our home networks will increase considerably. In order to service these subscribers, one must have the corresponding technical resources, the personnel and the sales infrastructure.

Other than this, the trend for integrated services has become more defined, such as telephony, Internet and hosting in one package. Consequently, we need to expand our range of services. In the future, we expect e-business and media projects to develop on the web.

And, finally, the regions have come to life. That is where the Internet public is really expanding.

The Russian market is becoming interesting to investors, and a powerful company has, therefore, a much better chance of playing a major role.

Q: In Moscow, there are only 853,000 Internet users and you're talking about broadening the spectrum of Internet services. What services do consumers need today in your opinion and are Russians ready for new and unfamiliar proposals?
A: By far the most demand is for Internet access. Primarily, this is for mass dial-up access. This acts as a pump that feeds the higher quality and, naturally, more expensive forms of connection such as permanent access via fixed link and radio channels as well as connections based on ADSL technology, which turns ordinary telephone lines into high-speed data transfer channels.

Another group of services is connected with the placement of corporate, or personal, sites on the Internet. The owners of Internet servers have started to understand that it is more effective to place their servers on specialized platforms run by major operators. This is perfectly natural as it is difficult to guarantee the necessary separate electrical feed, climate and data security in office conditions. Furthermore, an office's Internet channel does not always guarantee adequate access to the server.

True, at present, cheap integrated solutions are the most in demand such as Internet access combined with two to three telephone lines. There is a certain amount of interest in the new technology of Virtual Private Networks, which effectively unite a company's offices into a single corporate network.

Subscribers are showing interest in additional services. And while we have yet to receive requests for complex services such as Enterprise Resource Planning or Client Relations Management, these areas look promising.

MTU-Intel is working on a project to provide its users with a global roaming service. We're at the signing stage of a contract with U.S. Internet provider GRIC, which owns a global Internet access network encompassing more than 150 countries and with more than 12,000 connection points.

After signing the deal, MTU-Intel clients won't need to register with another provider or make long-distance calls to reach their provider. They will be able to select the closest connection point from the list of those in the system and work through it.

The reciprocal scheme has already been implemented and clients of the GRIC company can use Internet services at points where MTU-Intel is located.

Q: How are you placed on the market?
A: According to Comcon research group data, we control more than 35 percent of the private Internet market and about 26 percent of the corporate market.

Q: You have announced that your company will be expanding into the regions. What steps have you already taken?
A: We have reached an agreement for acquiring the shares of Etel, the company that provides dial-up and fixed-line services in Ryazan. The company currently has more than 3,000 clients. We are discussing the conditions of the deal and developing a plan for its realization.

Growth in the regions will involve various strategies. Everything depends on the specific region, the stance that its administration takes and on the local communications networks. Russia is such a large country that it is hard to apply a single strategy. In some regions, we may buy existing Internet providers, while in others, we may create new companies.

Q: How do you envisage the future of the Internet?
A: In the near future, the alliances formed between mobile phone companies and Internet operators will take a leading position internationally. Mobile telephones eliminate the distance factor. The Internet will become a window onto the world for everyone.

Together, mobile phone companies and Internet operators will give man the opportunity to structure his surroundings according to his interests. He will have complete freedom of choice in the presence of an endless supply of options.