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DSL is growing nicely, up 20% to 784K at Comstar/Sistema in Moscow, and they actually are gaining landline customers. They  have a mobile WiMAX network across Moscow and have begun one in Armenia. IPTV is making progress. DSL rates average about $11. Russia has high average broadband speeds, because much of the service is fiber to the basement. Comstar is affiliated with the Moscow phone company and works mostly from exchanges, which they are upgrading to ADSL2+.
Cashflow and profits look good according to the financial statements. Yet Sergey Pridantsev cut 3,000 employees last year, almost a quarter of the staff. Ray LeMaistre reports they are cutting capex by 60%. Something is wrong with this picture, but I won't try to untangle a complicated Russian corporate structure
Here's the DSL details from their financial reports.
Overview of Broadband Business in Moscow & the Regions
The Broadband business comprises the Group’s broadband operations in Moscow and the Russian Regions. The presentation below therefore provides an aggregated breakdown of the broadband business across the Group. The operating and financial results for the broadband businesses are included in each of the three following reporting segments.
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Q4 2008
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Q4 2007
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Growth
(%)
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Q3 2008
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Growth
(%)
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|
|
|
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MOSCOW
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|
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Residential subscribers
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|
|
|
|
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Total number of subscribers (000s)
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784
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651
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20%
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793
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(1%)
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Premium tariff segment........................................................................................
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664
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585
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14%
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688
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(3%)
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Mass-market segment..........................................................................................
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120
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66
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82%
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105
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15%
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Total Revenues (US$ millions)..............................................................................
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26.4
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27.7
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(5%)
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27.7
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(5%)
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Average monthly revenue per user (US$)............................................................
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11.2
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16.7
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(33%)
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11.6
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(3%)
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Premium segment..................................................................................................
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11.8
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17.7
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(34%)
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12.4
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(5%)
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Mass market segment..........................................................................................
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7.8
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–
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–
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5.8
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34%
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Average monthly revenue per user (RUR)...........................................................
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306.6
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411.5
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(25%)
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280.2
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9%
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Premium segment..................................................................................................
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321.0
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437.2
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(27%)
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300.1
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7%
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Mass market segment..........................................................................................
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214.0
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–
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–
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142.5
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50%
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Corporate subscribers
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Number of subscribers (000s).................................................................................
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51
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47
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10%
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51
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0%
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Revenues (US$ millions)........................................................................................
|
24
|
25
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(5%)
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27
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(13%)
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Average monthly revenue per user (US$)............................................................
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154.7
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182.6
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(15%)
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178.7
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(13%)
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Average monthly revenue per user (RUR)...........................................................
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4,210.9
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4,504.7
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(7%)
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4,333.1
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(3%)
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REGIONS
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Residential subscribers
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Number of subscribers (000s).................................................................................
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73
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7
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983%
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61
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19%
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Revenues (US$ millions).........................................................................................
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3
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0.3
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917%
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3
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6%
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Average monthly revenue per user (US$)............................................................
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15.8
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19.3
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(18%)
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17.7
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(11%)
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Average monthly revenue per user (RUR)
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432.2
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450.5
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(4%)
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429.8
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1%
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Corporate subscribers
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|
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Number of subscribers (000s).................................................................................
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17
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4
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354%
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16
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5%
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Revenues (US$ millions) ........................................................................................
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6.6
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1.9
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247%
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7.3
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(9%)
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Average monthly revenue per user (US$)............................................................
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133.0
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178.7
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(25%)
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161.0
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(17%)
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Average monthly revenue per user (RUR)
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3,631.5
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4,342.5
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(16%)
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3,873.8
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(6%)
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TOTAL.......................................................................................................................
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Number of broadband subscribers (000s)...........................................................
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925
|
708
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31%
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922
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0%
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Revenues (US$ millions).........................................................................................
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60.0
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55.0
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9%
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65.3
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(8%)
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Broadband in Moscow
The residential broadband subscriber base in Moscow increased by 20% year on year to 784 thousand customers by the end of 2008. 22% of MGTS residential voice customers now subscribe for broadband services, and the objective is to increase this level to 33% by the end of 2011.
The number of premium residential subscribers in Moscow increased by 14% year on year to 664 thousand and premium segment ARPU was down year on year in the fourth quarter from RUR 437.2 to RUR 321.0, and increased from RUR 300.1 in the third quarter of 2008. The number of double-play (internet & pay-TV) subscribers increased by 19% year on year to 145 thousand and was down by 1% quarter on quarter due to the optimization of subscriber spending on telecom services reflected in a slowdown in demand for value-added services during the fourth quarter of 2008.
Following the introduction of MGTS-branded mass market broadband services in October 2007, the number of mass market residential subscribers increased to 120 thousand from 105 thousand at the end of the third quarter, and almost doubled from 66 thousand at the end of 2007. The Mass market subscriber segment generated RUR 214 of ARPU in the fourth quarter, up 50% quarter on quarter.
Comstar completed the consolidation of a 100% stake in ZAO Comstar-Direct on December 30, 2008. Under the terms of the agreement, Comstar assumed management control of the the part of Comstar-Direct that provides multi-media services (broadband internet access and pay-TV) and its subscriber base.
Broadband in the Regions
The results for the fourth quarter of 2007 do not include the results of DTN and RTC, which have been consolidated from the beginning of 2008 according to the Group’s new accounting policy.
The number of residential subscribers was up 19% quarter on quarter to 73 thousand and ARPU was slightly up 1% quarter on quarter to RUR 432.2 following the introduction of unlimited plans that increased the competitiveness of the offering and successfully stimulated demand. The number of pay-TV subscribers in the regions grew by 3% quarter on quarter to 153 thousand customers due to the increased attractiveness of pay-TV services compared to more expensive kind of entertainment.
Comstar completed the acquisition of the STREAM-TV Group of regional operators in the first quarter of 2009. The operations will be consolidated since the beginning of the first quarter of 2009. Comstar commenced the reorganisation of the regional business in February 2009. The operations will be integrated under the wholly owned Comstar-Regions subsidiary, which is being created in the second quarter of 2009.
STREAM-TV’s pay-TV subscriber base increased by 10% year on year in the fourth quarter of 2008 to 1.8 million, including 1.4 million cable-TV subscribers and 390 thousand ‘social tariff’ TV subscribers. Cable-TV ARPU increased by 11% year on year and 2% quarter on quarter to RUR 123. The Group’s broadband internet access subscriber base increased by 74% year on year and 13% quarter on quarter to 205 thousand in the fourth quarter, and generated ARPU of RUR 376, compared to RUR 367 in the third quarter of 2008 and RUR 399 in the fourth quarter of 2007.
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