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Rostelecom restructures debt and operations

01 May 1999

In 1993 the government split Russia's telecoms system into 88 regional telcos, Rostelecom and some smaller telcos. In 1994 Rostelecom was partially privatized, with the state retaining a controlling interest. Deputy director-general Nina Shemetova explains to Basil Ballhatchet how Rostelecom has changed tack since Russia's economic crisis in 1998.

Until 1990 all telecoms services were provided in the Soviet Union by a single state telco managed by the Soviet ministry for telecommunications. In 1990 a joint stock company, named Sovtelecom, was established. It was allocated all the telecoms assets and operations for the Soviet Union. In 1991, following the coup in August and the subsequent dissolution of the Soviet Union, the company was renamed Intertelecom. With the establishment of the CIS (Commonwealth of Independent States), the newly independent countries separated their telecoms assets from Intertelecom.
This constituted only the first phase in the fragmentation of the country's telecoms assets. In 1992 the Russian government split Russia's share of Intertelecom into 88 regional telcos, grouped the international and domestic long-distance assets and placed them into a new joint stock company, which was called Rostelecom.

At that time, the telecoms system was underdeveloped and virtually obsolete. Russia had only 1,000 international...