OREANDA-NEWS. May 15, 2014. Rostelecom OJSC (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, announces that the Company has signed a government contract with the Federal Communications Agency (Rossvyaz) on providing universal communications services.

As part of this contract, legislative changes were established, including appointing Rostelecom as the sole provider of universal communications services in Russia. Within the scope of the contract, Rostelecom will carry out maintenance work on 148,000 universal service payphones and 21,000 public internet access points, and will also provide data transfer services at a speed of no less than 10Mbit/s in settlements with a population of between 250 and 500 people.

To fulfill the terms of the contract, Rostelecom will need to lay down new fibre optic communications lines of approximately 200,000 kilometres in length. This will enable Rostelecom to provide internet access for over 13,600 settlements across Russia with a total population of approximately 4 million.

The contract with Rostelecom will expire in 10 years’ time. It will be financed using resources from the universal services fund, which is managed by Rossvyaz. According to estimates, approximately RUB 163 billion will be used to provide universal services over the ten year period.

Oleg Dukhovnitsky, Head of the Federal Communications Agency (Rossvyaz), commented: “We today turned another page in the history of Russian telecommunications. The introduction of the law “On Communications” in 2003 formed the basis of the universal service system, and over the last 11 years, this system has become more versatile and flexible with regard to customers. This ten year contract is a huge responsibility for both the government and the operator, and Rossvyaz is ready to cooperate with Rostelecom in a constructive manner for the benefit of the Russian population.”

Sergey Kalugin, President of Rostelecom, also commented: “All of the world’s advanced countries are implementing projects to ensure that all their citizens’ have equal access to broadband. In Russia, we have five years to complete a large amount of work. By the end of 2018, all the settlements listed in the contract will have access to high-speed internet. Rostelecom is well-equipped to carry out this project. We have experience of implementing large-scale government projects, along with some of the country’s best infrastructure and leading specialists.

It’s important to note that the project will in fact see many more Russian settlements and residents receive universal services than is indicated in the contract. Fibre optic lines will be constructed in a manner that will see all neighbouring towns, villages and hamlets gain access to high-speed internet. As a result, millions of Russians will be thrust into the digital age and receive equal access to the information society with all its opportunities for communication, information exchange, access to public services, education, online banking and e-commerce. It will essentially provide everyone with equal access to all the things the modern person cannot imagine living without.”