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Internet Search Engine Bought by Upstart Holding
Ignoring recent global
losses in high-tech stocks, newly-born RuNet Holdings Ltd.
grabbed a third of the RuNet market by acquiring yandex.ru and
the Yandex trademark on Thursday.
Ru-Net hoping Ozon.ru becomes Russia’s Amazon
Ru-Net Holdings Ltd., the
newly founded, partly Western consortium, has made its first
move by acquiring a 51 percent stake in St. Petersburg online
bookseller Ozon for $1.8 million.
Apr 05, 2000
Russian Phone Firm Rostelecom Likely to Rise More on Internet Demand
OAO Rostelecom shares have more
than doubled in three months and are set to rise further on
optimism growing demand for Internet services will boost the
Russian long-distance phone service's profits, investors said.
Baring-UFG $20 mln fund targets Russian Internet
Baring
Vostok
Capital
Partners
and
Russia's
United
Financial
Group
have
opened
a
$20.5
million
Russian
Internet
direct
equity
fund
and
bought
a
$3
million
stake
in
an
on-line
book seller,
the
firms
said
on Friday.
Russian Golden Telecom sees
growth
Russian telecommunications
and Internet firm Golden Telecom will see steady revenues in
core telephony groups and rising sales in the integrated voice
and data arena, the company's president said.
Feb 25, 2000
Bradley Cook got new job
Bradley Cook, former Editor-in-Chief of The
St. Petersburg Times
in St. Petersburg, Russia, has joined the editorial team of NewsMax.com as
editor of NewsMaxUK.com.
Feb 24, 2000
Telia is breaking on
Russian market
By way of a share acquisition Telia has entered as
industrial partner in First National Holding/Telecominvest - one of the three
most important telecom and IT-groups in Russia. The transaction is valued at 700
million SEK.
Feb 23, 2000
Golden Telecom Introduces
Enhanced Internet Services
The new tariff plans provide
a complete package of Internet services for the dial-up access market. Monthly
pre-paid packages, including 20 or 50 hours online
Feb 22, 2000
No Windows 2000, No Cryptography
The Federal Agency of Government Communication and Information (FAPSI) is not
going to prevent the sales of Windows 2000 in Russia.
Feb 21, 2000
Comcor,
Andersen Group found joint venture
Moscow Telecommunications Corporation (Comcor)
and Andersen Group have announced that they have created a joined venture called
Comcor-TV.
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Russian Phone Firm Rostelecom Likely to Rise More on Internet Demand
Moscow, March 6 (Bloomberg) -- OAO Rostelecom shares have more
than doubled in three months and are set to rise further on
optimism growing demand for Internet services will boost the
Russian long-distance phone service's profits, investors said.
Rostelecom shares have gained 28 percent in the past two weeks
and 119 percent since the start of December, while the benchmark
RTS stock index rose 71 percent. The company, with a near-monopoly
on long-distance service in Russia, is gaining on optimism its
Internet business and a new trans-Russian fiber optic network will
drive growth, investors and analysts said.
``We are seeing an internet boom spilling over from the U.S.
into Europe and now spreading to Eastern Europe and Russia,'' said
David Mapley, managing director of Shimoda Capital Advisors Ltd. in
London, which has about $250 million under management and owns the
stock. ``Rostelecom is a sleeping giant.''
The company employs about 34,000 in Russia and has started to
move beyond traditional phone services to use its dominant position
in Russia to profit from new technology, including selling their
lines to Internet service providers to carry data. At the same
time, Rostelecom's foreign currency earnings are set to rise,
offsetting concern about its foreign debt costs, thanks to fees on
international calls passing through Russia on the company's new
fiber optic cables.
Internet Revenue
Last year, Rostelecom's revenue from Internet services more
than tripled to $6.8 million from $1.2 million, said Andrei
Braginsky, a telecommunications analyst at MFK Renaissance.
Currently, Internet traffic represents just 1 percent of overall
revenue, though that's set to change.
``Rostelecom has shown tremendous growth in Internet
traffic,'' said Braginsky. ``I predict revenue of about $20 million
from Internet traffic this year.''
Rostelecom probably lost about $261 million in 1999, on
revenue of $720 million, said Yevgeny Golossnoy, an analyst at
Troika Dialog. The data will be reported in June. In 1998, the
company lost $534 million, on revenue of $868 million.
The company rose as much as 1.5 percent, or 4.5 cents, to
$3.02, and closed up 0.3 percent, or 1 cent, at $2.99, after three
days of gains.
Analysts are mixed on the outlook for 2000. Golossnoy expects
another loss, of about $130 million, while Alexander Kabanovsky,
associate director in charge of telecommunications at Brunswick
Warburg in Moscow, predicts a profit, of more than $120 million.
``Rostelecom is offering exceptionally cheap rates to Internet
Service Providers in Russia,'' Kabanovsky said. ``The company is
the dominant force in the Russian internet structure.''
Growth Outlook
The growth potential of the Internet in Russia is attracting
international interest and investors have only recently begun to
see Rostelecom as a main beneficiary of that growth.
Andersen Group Inc., a U.S. company with stakes in a Russian
telecommunications company, said last month it plans a $350 million
joint venture in Moscow to provide cable television and high-speed
Internet access.
The venture with Moscow Telecommunications Corp., an eight-
year-old company started with support from the city government,
initially will target 1.5 million homes in central Moscow. Each
partner will provide $33 million in equity.
Anderson shares soared 364 percent in one day to a high of
$28, after the announcement.
``Perhaps we should just rename Rostelecom as Rostele.com:
that would probably increase its valuation four hundred-fold,''
said Eric Kraus, chief strategist at Nikoil Investment Co.
Rostelecom also recently completed a trans-Russian fiber-optic
cable, which can earn the company the foreign currency revenue it
to cover payments on about $446 million in foreign debt. Currently,
a call made in Tokyo to London goes around Russia; the new cable
means calls would go through Russia, earning Rostelecom foreign
currency revenue. Another option is to lease lines to international
operators.
Debt Burden
Rostelecom is late to benefit from the global surge in demand
for telecommunications stocks, in part because of its debt burden,
analysts said.
Last month, Rostelecom reached an agreement with Merrill Lynch
& Co. on extending payments on $100 million in debt. The company
has outstanding debts of about $500 million and debt servicing
obligations of about $50 million a year, said Ari Krel, an
telecommunications analyst at United Financial Group in Moscow.
Annual revenue of about $1 billion means the debt isn't ``a problem
in the long term,'' he said.
Those debts will continue to be a concern, since they must be
paid in foreign currency, increasing the company's exposure to the
risk of the ruble declining further.
``The fact is that the company is rescheduling debt, not
paying it off,'' said Mapley.
Rostelecom's newest competition in the industry includes
Golden Telecom Inc., which sold shares through an initial public
offering last year and then blanketed Moscow with modern
billboards.
The company is owned by Global TeleSystems Group Inc., a U.S.
company backed by billionaire George Soros, and has a mobile phone
unit, Internet provider and telephone service. Its American
depositary receipts have more than tripled since Dec. 1.
AO Vimpelcom, Russia's largest mobile phone company, also is
moving into Internet services. Its ADRs have more than doubled in
the past three months and are up about 25 percent this year.
``If I was making a Nasdaq for Russia, I would still include
Rostelecom but also Golden Telecom and Vimplecom,'' said Iouli
Matevosov, an analyst at Deutsche Bank AG.
Rostelecom's near monopoly position is attractive, he said,
though some analysts warn that has held the company back from
promoting innovative strategies.
