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Rostelecom takes lion’s share of Russian IPTV adds

Russian service provider Rostelecom added half a million TV subscribers in the year to June, taking its total to 9.5 million pay TV homes, up 6%.

The number of IPTV homes served by Rostelecom increased by 18% to 4.6 million. The operator claimed to account for over 80% of Russia’s IPTV additions in the first half of the year, as well as for about half of all new broadband subscriptions.

Rostelecom’s broadband base grew by 5% year-on-year to reach 12.6 million. Residential broadband subscribers numbered 11.8 million, up 5%, while fibre subscribers numbered 7.5 million, up 12%.

Revenue from TV in the second quarter amounted to RUB6.809 billion (€95 million), up 19%. Broadband revenue grew by 6% in the same period to RUB17.610 billion, while fixed telephony revenue fell by 10% to RUB19.763 billion.

The operator attributed the rise in TV revenues growth in its interactive TV subscriber base, an increase in the consumption of video-on-demand services, and higher ARPU.

The larger number of TV subscribers contributed to an increase in costs, with interconnection charges, which includes these costs, up 16% to RUB1.9 billion.

Rostelecom’s total Q2 revenue was RUB75.166 billion, up 5%.

“All our business segments have grown starting from retail to operator business. As a result, our operating income before depreciation has returned to growth and we have managed to increase margins in the second quarter of 2017,” said Rostelecom president Mikhail Oseevskiy.

“We managed to almost double net income as well as significantly improve our free cash flow position. The key driver to our success this quarter is the growing capabilities of our digital business segment, which is underpinned by the most extensive network infrastructure in Russia. We continue to take the lead with a lion’s share of pay TV and broadband market subscribers, actively promote cloud services, data centre and cyber security services, thrive on the synergies from interaction with Tele2 in the joint use of communication channels and offer our network capacity to other telecom operators.”