Deutsche Telekom

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					         The Russia Journal                                               B U S I N E S S                                                                   NOVEMBER 1 - 7, 1999 Page 19




Deutsche Telekom...                                                                                                         Moscow tunes in
Continued from Page 9
said: "The acquisition of most of
MediaOne International's assets in
Central Europe and Russia is a logical
                                         International, said, “We are delight-     "Further, in Russia, one should be
                                         ed with this transaction because it extremely careful because [the tele-
                                         involves the right buyer at the right com business] requires high invest-
                                         price, and allows for con-                          ment and is offering low
                                                                                                                             to the Internet
expansion of Deutsche Telekom's          tinuity of ownership and                            returns. At the same                                               posts are expected to go to
presence in Europe."                     performance.                                        time, the mobile [phone]    By POLINA ZVEREVA                      ArtCom’s top managers.
   Telekom is a former state monop-         RTDC holdings also                               market is likely to be      The Russia Journal                        Detailed information on the
oly and Europe's biggest phone com-      include 22 percent of                               very lucrative in the                                              project is scarce and being kept


                                                                                                                         R
pany, and while its rivals have been     Moscow Cellular Com-                                future."                           ussian telecom companies        confidential.
battling to carve up the rich Western    pany (MCC), which has                                 Other analysts believe           ArtCom and Neocom-R                It is known, however, that the
European markets, analysts say           approximately 90,000                                that the entire telecom-           announced a merger and          first stage is scheduled to be com-
Telekom believes Eastern Europe          cellular subscribers; and                           munications sector in       joint project to set up radio access   plete by late January 2000, and
offers long-term prospects for rela-     another 42.5 percent of                             Russia could begin to       to the Internet for 4,000 clients in   that investments provided in
tively cheap prices.                     Delta Telecom, a St.                                show real growth in the     Moscow and the Moscow region.          exchange for stakes in the project
   "If you cannot buy in the West, you   Petersburg        cellular                          near future. They cau-         The companies were estab-           will amount to several million dol-
buy in the East," Juergen Roethig,       provider with about               Gary Ames         tioned, however, that       lished in 1995, and since 1996 have    lars.
telecommunications analyst in            45,500 subscribers.                                 the sector would require    cooperated        in     developing       Names of investors have not
Frankfurt at the B. Meltzer Co. bank,       Alex Kantarovich, a telecommu- a longer-term perspective.                    Moscow’s wireless data transfer        been released, and according to
told the International Herald            nications analyst with IBN AMRO           "If one is prepared to engage in      network.                               preliminary estimates, the project
Tribune.                                 Equities Russia, said it would be a strategic investment and the indus-            Currently, the network com-         will repay in four years.
   RTDC was established in               great boost if DT spent the money to try undergoes some restructuring,          prises 20 base stations, owns             In the first stage, the number of
December 1993 by U.S. telecommu-         upgrade MCC to digital, but it then the telecoms market will                    access lines connecting it to          base stations will be increased to
nications company MediaOne In-           would require a large strategic become quite interesting," said                 Moscow’s       leading     Internet    40 and the number of subscribers
ternational and eight independent        investment.                             Brunswick's Kabanovsky. "Say what       providers, and services around         to 1,000.
investment organizations. Until it          "To make MCC digital would you will, growth is really possible."             200 corporate clients.                    Okhotnikov said the project will
sold its stake to Deutsche Telekom,      require an investment of $100 mil-        He said the sector could look quite      The new project aims to drasti-     aim to make Internet access via
MediaOne International held a 66.5       lion to $150 million, and given that different by as soon as the end of next    cally expand the network and its       radio as affordable and popular as
percent shareholding in RTDC.            Deutsche will only control 22 per- year, pointing to a potential freeing        clientele.                             via ordinary telephone lines, while
   Gary Ames, chief executive offi-      cent of it through RTDC, it might up of the pricing structure through              ArtCom will handle network          the quality of radio access is
cer and president of MediaOne            not want to put in so much money."      the changes of tariff regulations.      construction and servicing, while      thought to be much higher.
                                                                                                                         Neocom-R, which owns radio                "Our aim is to make our services
                                                                                                                         bands, will function as operator.      as quick and convenient as those
                                                                                                                         The companies will make a partial      of, say, Kosmos TV or NTV-Plus


                    PAGE
                                                                                                                         asset swap, details of which have      satellite television channels,"
                                                                                                                         not been revealed for commercial       Okhotnikov said.
                                                                                                                         reasons.                                  As the project is implemented,
                                                                                                                            ArtCom       CEO      Alexander     ArtCom and Neocom-R hope to
                                                                                                                         Okhotnikov said that, after the        reduce prices to $900 for a client’s
     The Russia Journal                                                                                                  swap, the companies will consoli-
                                                                                                                         date budgets, set up a unified
                                                                                                                         management board and reorga-
                                                                                                                                                                equipment set and $120 for a
                                                                                                                                                                monthly subscription, and to build
                                                                                                                                                                clientele by attracting small busi-
   Call 913 3515 or 234 9696 and leave message for pager ‘RJ’                                                            nize the operation’s structure. Key    nessmen and individuals.




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