Last year, unexpectedly for the market, the city's largest transit operator, which provides all commercial operators with access to the city network, Petersburg Transit Telecom CJSC (PTT), announced the start of work in a new segment. The company decided to begin installing telephones in new buildings by launching the Line 1 project, which means PTT's entry into the retail market. PTT General Director EVGENY VASILIEV told Kommersant correspondent BORIS GORLIN about the prospects of this project and the company’s performance results for the year.
— What are the financial results of the company in 2004?
— We exceeded the business plan. Our revenue has come close to $50 million. As for quantitative results, last year we continued to introduce numbering capacity for mobile and fixed-line operators. In total, about 35 thousand issues were sold. And the total capacity involved over the five years of our work has already amounted to almost 1 million numbers.
— What tasks are set for 2005?
— At the end of 2004, we introduced new 50 thousand numbers from the sixth millionth zone, which we are going to sell this year and next.
— Your company controls almost all commercial traffic in the city. What trends emerged in the commercial communications services market in 2004?
— At the beginning of our activities, the lion's share of income was generated by mobile operators. However, their share of total revenue is already just over 50%. At the same time, the share of Internet providers and fixed-line operators is growing rapidly. In January alone, we used about 1 thousand numbers for them.
— How many direct numbers are used by mobile operators today?
- This is confidential information. But I can say that we have used almost the entire ninth millionth zone.
— What investments are you planning in your network in 2005?
— We have decided to invest in modernizing our IP network. I think that we will carry out the relevant work in the first half of this year. In addition, we are currently undergoing a tender for the supply of equipment for broadband wireless access. The radio network will allow us to significantly reduce the time it takes to connect clients and improve our position both in the retail and wholesale markets. Alcatel, Siemens and other manufacturers are participating in the tender. At the first stage, we plan to invest about $1 million in the radio network.
— Why did the transit operator, which provides services to almost all commercial operators, need to enter the retail market and begin installing telephones in new buildings?
— The retail market is growing quite quickly, and it would be wrong not to be present in it. The Line 1 project has its own specifics; it involves providing a whole range of services at once: telephony, broadband Internet and cable television. For a modern consumer, simply telephone communication is no longer enough; for example, more than 50% of Line 1 subscribers also want to use broadband Internet access. This year we plan to make several tactical changes to the project. Until now, we have mainly concentrated on working with HOAs, that is, we have installed telephones for already occupied properties. This year we are going to negotiate with developers about installing telephones in new buildings at the design stage. Despite the fact that this approach is more expensive, it will pay off in a strategic perspective. We are now formalizing cooperation with the largest developers in the city. I think this is a mutually beneficial process. If a year ago it was possible to easily sell any apartment and demand noticeably exceeded supply, now there is some stabilization in the primary real estate market.
— What results did Line 1 achieve over the past year?
— Over the course of a year, we were able to connect about 30 houses, with a total of about 10 thousand apartments.
— How competitive is this market segment?
— We really faced serious competition, mainly from small companies. However, the demand for high-quality communication services is still far from satisfied. Besides, it seems to me, we have advantages. We can provide more comprehensive services. For example, in addition to traditional services, we are ready to offer solutions related to apartment security. It is difficult for small providers to solve complex problems, and basically what they are limited to is telephone communication plus Internet access.
— How big is your investment in Line 1?
— I can say that installing telephones in one house costs us several tens of thousands of dollars. This year we plan to connect about 40 houses.
— What is the role of Line 1 CJSC in your project of the same name?
— All over the world there is now a steady trend of the emergence of so-called sales offices specializing exclusively in sales. In other words, the generation, maintenance and operation of a service are separated from its implementation. In our case, Line 1 CJSC is nothing more than a sales office. Our interaction with this company is based on an agency basis. For each client, Line 1 CJSC receives a reward.
— What other companies do you plan to start cooperation with according to the same scheme?
— Today we are satisfied with our cooperation with Line 1. So far we do not see other companies on the market with which we could enter into similar partnership agreements.
— PTT de facto occupies a monopoly position in the wholesale services market for local operators. At the same time, you entered the retail market. Are you afraid that market regulators, such as the antimonopoly agency, will show interest in you?
— We adhere to the fair-play policy in the market, we do not offer dumping tariffs and have correctly built our relationships with other market participants, including during the implementation of the Line 1 project. If a year ago some players expressed their concern about PTT entering the retail market, today no one has such concern.

Newspaper "Kommersant St. Petersburg" No. 30/P dated February 21, 2005, p. 3

"We do not propose dumping tariffs"