OREANDA-NEWS. On April 05, 2007 Uralsvyazinform (RTS and MICEX: URSI/URSIP, ADR: UVYZY/UVYZYP) hereby released its unaudited, unconsolidated operating and financial results of 2006 in accordance with Russian Accounting Standards, reported the press-centre of  Uralsvyazinform.
Growth in revenue was mainly achieved as a result of:
- the consolidation of the subsidiary mobile and Internet business which was completed on July 1, 2005;
- higher earnings from provision of cellular services due to rise in GSM wireless subscribers (Utel trademark);
- higher earnings from provision of VAS due to a rise in the number of users and the value of ISP, datacom – with broadband users surging 6.8 times – from 16,900 to 115,000;
- higher earnings from telecom operators (mainly from connection and transmission fees) in conjunction with the entry into force in 2006 of new statutory provisions in line with the Federal Law “On Telecommunications”;
- higher earnings from intrazonal traffic in conjunction with the introduction of the Calling Party Pays (CCP) principle on July 1, 2006, as a result of which calls from fixed lines to cellular phones are charged as intrazonal telephone calls;
- higher earnings from the provision of local voice due to growth in the number of local voice subscribers and the indexation of tariffs as of September 1, 2005.
Growth in expenses was due to:
- higher depreciation deductions due to the commissioning of fixed assets;
- higher payroll due to the accrual of reserves as future expenses in accordance with the accounting policy;
- the write-off of expenses for work in progress;
- formation of reserves against bad debts, stocktaking of assets and obligations;
- additional expenses related to the entry into force as of February 1, 2007 of tariff plans for local voice service (cost of materials, advertising and other expenses);
- higher outsourcing expenses charged by organizations for maintenance and repair due to rise in cost of repair work.
The increase in the number of main lines in 2006 stood at 92,800.
Revenue from the provision of local voice traffic rose 5.3% compared with 2005 and reached Rub 9,633,700.  Higher revenue was also the result of local voice tariff hikes as of September 1, 2005 and also an increase of 92,800 main telephone lines.
The breakdown of income from local calls based on consumer categories:
households – 72.2 % (72.7 % - 2005)
organizations – 27.8 % (27.3% - 2005)
Revenue from the provision of intrazonal calls stood at Rub 3,694,200,000 in 2006.  Effective January 1, 2006 Uralsvyazinform has not provided LD services in conjunction with the change in legislation and the enactment of new interconnect rules with regard to interconnected operators – Rostelecom, MTT, etc.
The breakdown of intrazonal telephone traffic based on consumer categories:
households – 49.0% (59.0 % - 2005)
organizations – 51.0%  (41.0 % - 2005)
The digitalization rate of intrazonal LD channels (total length) stood at 97.53% as of January 1, 2007 (97.50% as of January 1, 2006).
Cellular traffic (Utel) – 29.8% of revenue
In accordance with Russian Accounting Standards (RAS) only the branches of the company that provide cellular services in the Perm region and the Sverdlov region were included in the “Cellular Communication” section of financial statement of Uralsvyazinform.  The results of three other subsidiaries – Ermak RMS, South Urals Cellular Telephone, Tyumenruscom, which provide cellular services in the Kurgan, Chelyabinsk and Tyumen regions, including the Khanty-Mansiisk and Yamal-Nenets Autonomous Districts, were consolidated only in the company’s IAS financial report.  Due to the reorganization (merger) of subsidiaries which provide cellular services (Ermak RMS, South Urals Cellular Telephone, Tyumenruscom) and the formation of a single inter-regional cellular branch of Uralsvyazinform, as of July 1, 2005 the financial results of the branch’s performance in the third and fourth quarters of 2005 were included in the 2005 financial statement.
Revenue from the cellular business segment rose 70.6% compared with 2005 and stood at Rub 10,009,600.  Additional services (SMS, MMS, GPRS) account for about 11% (15% in 2005) of cellular revenue.
Average revenue per user (ARPU) in the cellular business stood at $7.9 mln ($8.6 mln in 2005).
Uralsvyazinform is the main telecom operator in the Urals region.  The company operates in seven constituent entities of the Russian Federation in an area of 1.9 mln sq km and a population of over 15 mln: Kurgan, Sverdlov, Tyumen and Chelyabinsk regions.  Perm krai, Khanty-Mansiik and Yamal-Nenets autonomous districts.
As of April 1, 2007 Uralsvyazinform has a subscriber base of 3.7 mln fixed-line, 4.5 mln cellular subscribers and 140,000 broadband access users.  Cellular and value-added services are provided under the Utel trademark. The company has a workforce of 31,000.
Uralsvyazinform has been assigned a BB-/Stable rating from Standard&Poor’s and B+/Stable from Fitch Ratings. The company’s shares trade on Russian (RTS and MICEX) and ADRs on foreign stock exchanges (Berlin and Frankfurt exchanges).
Uralsvyazinform has been assigned credit ratings by leading international organizations. The operator’s market capitalization currently stands at $2.4 bln. For more information on the company, see the official websites of Uralsvyazinform at: www.usi.ru. www.u-tel.ru.