Developing product ecosystems & improving customer experience
Rostelecom’s strategic priorities include, above all, developing and offering digital services for families, business, and government customers while continuously improving customer service.
We build convenient, robust ecosystems providing a wide range of services to every customer segment, including households (B2C), corporate (B2B), and government (B2G) customers, and other telecoms operators (B2O).
A key highlight of 2018 was the presentation of our new positioning and brand. The Company launched its new development strategy, and presented new digital services and tariff lines driven by market changes and the Company’s priorities. Our refreshed brand reflects the ongoing changes within the Company and was relaunched to:
- raise our profile as a an advanced IT company;
- develop a universal visual language, easy to use across digital interfaces;
- communicate the new strategy to employees and market participants.
The Company is increasingly refocusing from technology to consumer needs, putting people and their emotions at the heart of our new brand, which emphasizes Rostelecom’s status as an advanced digital company that relates to every customer – from gamers to government organisations. The brand’s diverse graphics and colours reflect the wide range of opportunities we are creating for people, businesses, and the country.
All functions and business units of the Company were involved in the rebranding effort, which included launching Rostelecom’s new site, boosting conversion by 25%. We have also seen growth across other key metrics, including the subscriber base.
B2C
Rostelecom offers a wide range of services and products, building a digital environment around every family. Our digital services in entertainment, education, healthcare, data storage, management, and security bring value to customers and are essential for today’s consumers.
Approximately half of Rostelecom’s revenue is generated by the retail segment, making it a major driver of the Company’s overall performance. In 2018, the household segment grew by 1% to RUB 137 billion.
Anchor services: broadband and Pay TV
The Company continues to attract new customers, growing its subscriber base and ARPU for key anchor services – broadband and Pay TV.
Rostelecom is consistently strengthening its position in the internet access market. Subscriber numbers for our most popular fibre plans are increasing at a rapid pace – up by 5% in 2018. ARPU is also growing, driven among others by our promotions of attractive tariff options (Gaming tariff, Broadband + Antivirus, Parental Control, Turbo Acceleration, etc.).
Customers increasingly take up broadband bundled with Rostelecom’s another basic retail service – Interactive TV. This consumer behaviour pattern contributes to boosted sales of bundled offers. Moreover, the Interactive TV product is often a driver that prompts customers to trade up to premium broadband plans, as streaming requires higher connection speeds for the best viewing experience. As a result, our Pay TV subscriber base grew by 4% in 2018 to 10.1 million households. In 2018, the Company passed the milestone of 10 million users in its subscriber base, driven by an 8% increase in the IPTV retail customer base to 5,2 million.
Successful promotion of digital products in our core broadband and Pay TV markets contributes to the achievement of our long-term strategic goal of increasing blended ARPU per household, with the metric growing by 8% in 2018.
Digital service revenue has continued to replace the gradually declining fixed-line revenue. In 2018, Rostelecom implemented a number of tariff initiatives in the fixed-line market to bolster the appeal of voice services.
Advanced digital services for a household ecosystem
Rostelecom develops advanced digital services for millions of Russian families. Today, access to technology alone is no longer a critical factor, what matters is the opportunity it provides to improve quality of life and make it more comfortable. Therefore, the Company is shifting its focus from gross adds to the quality and reach of digital service ecosystems covering all spheres of life.
In 2018, new products, including Smart Home Video Surveillance, demonstrated strong performance. Our Gaming tariff and Antivirus product have continued to gain traction. MVNO continues growing at a good pace, and a fixed-mobile converged service has been launched to complement the traditional mobile telephony.
The launch of Rostelecom’s OTT video product family under the Wink brand has bolstered the active promotion of new services:For more details on the brand see wink.rt.ru in 2018, over 1.2 million customers installed the app on their mobile devices and Smart TVs.
One year after the launch of the Smart Home Video Surveillance service in 2017, its monthly sales increased 13-fold. During 2018, the system’s functionality was significantly improved, a 24/7 technical support was launched for the Smart Home service, the range of available cameras was expanded, and new payment options and security services were added.
Rostelecom aims to become a leader in the Russian market for Smart Home solutions by 2020 and plans to continue enhancing the product. In particular, we are planning to integrate video surveillance and Smart Home with IPTV products, and significantly expand our smart ecosystem and the fleet of available customer premises equipment, by aggressively selling our Wi-Fi router with the embedded Smart Home solution. Key focus areas include increasing the profitability of Smart Home services through new tariff plans and options, and bundled offers.
In 2018, revenue from our Antivirus product grew by 142%, with the subscriber base up by 166%.
Rostelecom migrated to a new technology platform in 2018, enabling more stable service delivery, Rostelecom-side tariffing, and an expanded mix of sales channels. The Company is now able to quickly launch new software and electronic products. Additionally, we have launched tariff plans bundled with an antivirus subscription.
Priority growth areas include direct interaction with platforms operated by antivirus vendors, product launches of existing partners and new vendors, as well as enhancing the sales channels.
In 2018, MVNO revenue in the retail segment grew by over 100%. 2018 highlights:
- The active subscriber base increased by 57%
- The share of active users grew by 13 pp
- Subscriber activity increased by 50% during the second month after the service launch due higher quality sales
To improve the customer service component of mobile telephony and make the product more attractive, the following projects were launched in 2018:
- Online TV promotion: free access to the Light Promo package in the Wink app
- Mobile Programme promotion: mobile telephony as a gift to customers taking up the Home Internet and Interactive TV services
- Welcome promotion: a 20% discount for six months for customers transferring their mobile number to Rostelecom
- A pilot convergent service project within the area covered by the North-West Macroregional Branch, with the service share in broadband sales rising to 30%
- Mobile telephony development plans for 2019 include launching value-added services such as Yandex.Disc, Antivirus, and Find My Kids.
Towards the end of 2018, we launched sales of our first smart intercom and CCTV systems. Priority areas for further growth include launching national sales of the Smart Home service platform for residents and property management companies, and full rollout of CCTV and smart intercom solutions, as well as other related services.
Rostelecom Lyceum
The Rostelecom Lyceum service has been developed as part of our advanced digital service offering, allowing families across the country to use educational resources via both Rostelecom’s services and partner services, while staying at home. In 2018, we launched the Rostelecom Lyceum educational marketplaceFor more details on the marketplace see website (in Russian). and a subscription model based on partner products.
Rostelecom Lectorium
Under the Rostelecom Lectorium project, we launched a Learning section based on the Wink multimedia platform. We signed agreements with Netology online education centre and Babystep online resource to place educational content on the Wink platform.
B2B/G
Rostelecom builds digital ecosystems for business and government customers. The Company offers a wide range of digital solutions for various industries and is a reliable contractor in government-sponsored initiatives at the regional and federal levels.
In 2018, our revenue from the corporate and government segments grew by 11% to RUB 122 billion, driven largely by the implementation of the Smart City and video surveillance projects, and the promotion of data centres and cloud solutions, as well as other digital services which became popular both among a wide range of major corporate and government customers, and SMEs.
In 2018, we continued to focus on rolling out and enhancing services for corporate customers both in the traditional mobile and broadband segments, and in cloud and platform solutions, as well as video surveillance, analytics, and other advanced digital solutions.
Rostelecom also worked on strategic projects within the Digital Economy programme, including internet access for healthcare centres, and access points in small communities within the BDD project. A key highlight of 2018 was video surveillance of the Russian presidential election, with thousands of Rostelecom specialists working in mobile teams to ensure the smooth operation of all systems. The success of this project has once again emphasised Rostelecom’s strong expertise and raised its profile as a reliable partner.
We also continued to foster cooperation with government agencies, implementing multiple local initiatives in Russian regions.
As part of our ecosystem-based approach, we seek to provide a single access point for digital services and products helping business and government customers with any task. Rostelecom made significant progress in information security, and promotion of Corporate TV, Federal Wi-Fi, virtual PBX, and cloud-based IaaS solutions.
Rostelecom has further strengthened its leadership in the corporate segment: the number of subscribers using our internet access services grew by 6% to 1 million connections, with the number of subscribers connected to fibre rising by 27% to 416 thousand.
Revenue from the service grew by 117% to RUB 320.5 million. In 2018, one of the key projects in interactive television for corporate entities was selling commercial TV panels bundled with the service. Revenue from sales of equipment exceeded RUB 50 million in 2018. Over 80 hotels were connected in the hotel TV segment.
Our new product, Rostelecom.Screens, has already gained traction with customers, with a number of key projects launched in 2018. Going forward, we plan to ramp up the take-up rates for the product.
Our Wi-Fi service is highly popular among a wide range of corporate customers, with the number of hotspots offered via the Federal Wi-Fi service reaching 27,500 in 2018, doubling our revenue from the service.
Another major project was the Company’s support for the 2018 FIFA World Cup. Rostelecom provided Wi-Fi access service for eight stadiums and five fan parks. We also provided a FAN ID‑based user authorisation service for the World Cup guests, making the authorisation procedure much simpler for foreign visitors.
In 2018, we also launched a Wi-Fi authorisation service in a third party channel (Wi-Fi OTT).
Plans for 2019 include a number of major projects, including Wi-Fi access on the Tele2 Russia’s retail network, at the venues of the 29th Winter Universiade in Krasnoyarsk in 2019, and at branches of Pochta Bank and VTB. We are also planning to launch new services for the Managed Wi-Fi and Wi‑Fi Radar products.
Plans also include launching the updated platform 2.0 – an integrated approach comprising the range of existing solutions within a single federal platform. Plans for 2020 include migrating all existing solutions to the platform 2.0.
In 2018, we made considerable progress in developing and promoting Virtual PBX in the B2B segment. The Company’s revenue from the service grew by over 70% year-on-year in 2018, while the customer base tripled.
During 2018, we launched the service in 80 new cities, now offering Virtual PBX in 360 cities across the country.
Technical support optimisation and a more than tenfold reduction in response times were among the major highlights of 2018. We also developed a monitoring system which includes continuous interrogation of macroregional branches and Virtual PBX testing to ensure smooth operation of all platform components and the overall seamless delivery of the service.
We also launched the FMC serviceFixed Mobile Convergence is a technological solution at the junction of difierent type networks – fixed-line and mobile, enabling the use of same short codes for fixed-line and mobile phones within a single network within the Virtual PBX, enabling seamless integration of office and mobile voice services into a single communication space to make short code dialling available for both incoming and outgoing calls of any employee.
The key initiatives implemented in 2018 include integrating the Virtual PBX and CRM solutions – we developed a universal open API to integrate the Virtual PBX with customers’ CRM systems.
In 2018, the Power Dialler service was added to the Virtual PBX, providing a major advantage of generating call statistics with final call outcomes. The new service is relevant to virtually any business.
Plans for 2019 and 2020 include the rollout of new, sophisticated innovative features such as speech analysis and call tracking, and further service automation.
Under the Digital Economy of the Russian Federation programme, Rostelecom implemented a number of activities to support the expansion of data centres:
- We developed a range of measures to develop the data centre and cloud industries, including building a Virtual Economic Zone
- We designed a data centre classification model to support further development of a national classification standard and certification framework for data centres
- We conducted a study of data storage and processing infrastructure in the Russian Federation, the results of which will be used as inputs in developing an interactive Blueprint for Developing Telecommunications Networks and Data Storage and Processing Infrastructure in the Russian Federation for 2019–2024
The total capacity of Rostelecom’s data centre network reached 5,870 racks in 2018, consolidating our leadership in the market for commercial data centre services. In 2018, Rostelecom commissioned two data centre modules in Udomlya and a new hall in Data Centre M9. Our market share was approximately 15%Rostelecom and iKS-Consulting estimate the total size of the Russian data centre market in 2018 at 39,900 racks. as at the year-end 2018.
We have continued to actively grow our business segment of regional data centres, commencing the design and construction of data centres in Saint Petersburg, Novosibirsk, and Yekaterinburg in 2018, scheduled for commissioning in 2019–2020. Rostelecom commenced FEED on its data centre projects in Nizhny Novgorod and Rostov-on-Don and is selecting a site for a project in the Far Eastern Federal District.
MSK-IX (part of Rostelecom Group) operates the largest internet exchange network in Russia and CIS countries, with over 500 members connected to MSK-IX’s network, including operators based in Russia, CIS states, and Baltic countries, content providers, research and educational networks, financial institutions, and government organisations.
A medialogistics platform, built by MSK-IX in 2018, has significantly simplified access to TV channels for authorised operators. MSK-IX has successfully protected the Russian segment of the internet against cyber attacks during the Russian presidential election.
The core product in our cloud service offering is the Virtual Data Centre service, with its revenue increasing by 40% in 2018.
Rostelecom also implemented a number of key projects based on cloud technology in 2018.
- Based on VDIVDI – Virtual Desktop Infrastructure modules of TIONIX Cloud Platform, we launched a project for the Federal Tax Service of Russia with 16 thousand users. As part of the project, we built an IT infrastructure for over 40 thousand online cameras with video data storage capacity of 4.8 PB.
- We built a dedicated architecture independent platform for the Service Quality Management service, a solution to monitor the quality of internet access services.
- We designed and deployed infrastructure for Rostelecom’s Unified Biometric System.
- Rostelecom successfully developed a digital transformation concept and ran pilot digital projects for the Prosecutor General’s Office of the Russian Federation.
- We built a dedicated infrastructure to host the Direct Line with the President information system.
- We launched a virtual infrastructure for the E-Government subsystem collecting feedback on the performance of the E-Government information systems. We also installed a backup capacity for the E-Government services and migrated the existing infrastructure to the oVirtoVirt is a free cross-platform virtualisation solution. virtualisation management system.
- We built a backup data centre to support the Unified State Register of Immovable Property and provide IaaS servicesInfrastructure as a service (IaaS) is a cloud computing service model delivering essential IT resources to subscribers.for the Federal Service for State Registration, Cadastre, and Cartography (Rosreestr).
- With support from the Technical Centre of Internet (part of the Rostelecom – Data Processing Centres centre of excellence), we started servicing .RU, .РФ, and .SU domains. We also started to provide Content Delivery Network (CDN) services based on solutions by NGENIX.
- In 2018, Rostelecom rolled out CDN NGENIX solutions for the Group’s retail OTT business.
- As part of our efforts to ensure information transparency of the Russian presidential election, we used a cloud-based NGENIX platform. We created secure infrastructure for the нашвыбор2018.рф portal and ensured video broadcasting from the polls. We also leveraged CDN technologies to ensure quality internet broadcasting of the FIFA World Cup events.
In 2018, Rostelecom’s proprietary information security solutions and services were used across all industries of the Russian economy:
- In the public sector, we were involved in ensuring cyber security for federal digital transformation projects of ministries and agencies, and in protecting the digital infrastructure of a number of regional executive authorities
- In the fuel and energy sector, we implemented projects on protection from internal threats, and cyber attack monitoring and response
- At financial institutions, we implement projects on protection against cybercrimes and attempts to steal money from enterprise information systems
- In the military and defence industries
- In heavy industry, retail. and agricultural sector
Rostelecom also maintains leadership in the market for DDoS protection services. Rostelecom-Solar, our DDoS protection solution, deflects denial-of-service attacks against networks, applications, and web services. We use continuous monitoring to detect spurious traffic and re-route it to special fault-tolerant cleaning systems.
Launch of Rostelecom-Solar
A major highlight of 2018 was the establishment of Rostelecom-Solar, a nationwide provider of service and technology solutions for information asset protection, target monitoring, and information security management. The company was set up based on Solar Security, a technological leader in the Russian information security market acquired in May 2018. The deal has allowed Rostelecom to grow its foothold in the market by leveraging popular, well established products and services.
The company employs over 350 cyber security experts and combines classical information security services with around-the-clock proactive cyber threat monitoring and response. The successful protection of the 2018 FIFA World Cup events against cyber attacks was the most illustrative example of our 2018 projects in the B2B segment. The nationwide operator is focused on three main areas.
The key challenge for the company going forward is strengthening its leadership in the cyber security market.
| Services | A range of information security services from Russia’s first and leading commercial Security Operations Centre Solar JSOC, including incident monitoring and response, protection of external internet services, and other services |
| Proprietary solutions | Development of new cyber security technologies and products, and enhancing and promoting existing Rostelecom-Solar solutions |
| Integrated cyber security solutions | Integrated projects such as deploying Security Operations Centres (SOC), corporate and departmental centres of the State System for Detecting, Preventing, and Mitigating Computer Attacks (GosSOPKA), ensuring security of critical information infrastructure, and building and operating integrated turnkey data protection systems |
Unified Cyber Security Platform
The unified platform of cyber security services is targeted at the mass B2B segment and uses virtualisation to ensure full manageability, rapid scalability, and support of geographically distributed networks.
The basic service package includes protection from network attacks (Unified Threat Management), e-mail protection (Secure Email Gateway), and web application security (Web Application Firewall). By the end of 2019, the number of services will be more than doubled.
Protection of critical information infrastructure of the Russian Federation
In 2018, Rostelecom implemented its first projects to protect the critical information infrastructure of the Russian Federation in the public and energy sectors, and completed a number of major projects to provide information security services for government authorities.
The Digital Economy of the Russian Federation national programme was the key driver behind the development of the system. The programme aims to make digital services more accessible for people in remote areas and mobility impaired people. The programme’s objectives can only be achieved if the highest standards of information security are ensured.
The Unified Biometric System enables banks to open an account or extend a loan to a customer without physical presence and only needs the user’s public service portal login and password. The solution thus allows banks to fully digitise this customer journey while providing consumers with the opportunity to sign documents remotely.
In 2019, a pilot project will be launched with member banks of the FinTech Association, moving the loan application process online. The Digital Profile service will enable customers to log in to the bank’s mobile app and provide the bank with access to required documents. The bank will automatically fill in the profile and issue a loan online. These improvements will reduce the costs of collecting and checking documents and thus speed up the service delivery, making it more attractive.
Digital Profile will also provide control over customer data sharing. The mobile application, scheduled for development in 2019, will provide visibility into who and when has been authorised to access personal data and allow cancelling the access in one click once the service has been provided.
In future, Digital Profile can be rolled out to other economic sectors to digitize and simplify processes as well as to improve the customer experience.
In 2018, Rostelecom continued to build up its capabilities in geodata and spatial data.
In January 2018, the Arkhangelsk Region launched Zemlya, an integrated GIS (Geodata Information System), designed by Rostelecom under a Public Contract with the Government of the Arkhangelsk Region. The system was developed to provide geoanalytical support to the authorities of the Arkhangelsk Region, including for integrating legacy IT systems into a single information space.
Rostelecom continued to improve its RusGIS platform during the year – a new version of the platform was created, featuring an improved interface and data loading tools. We also upgraded the data storage structure, integrated a dynamic control mechanism, and designed a style editor. As a result, data loading time was reduced tenfold.
The Centre Macroregional Branch launched a RusGIS platform-based network planning service, enabling a real-time analysis of spatial information for improved SME connectivity.
In 2018, we signed an agreement on strategic partnership between RusGIS and Rusagro, and developed a product concept for collecting and updating data locally through a partnership with the Russian Post and with support from Sberbank of Russia. As part of our efforts to further enhance RusGIS, we also signed a two-year contract to develop the Leningrad Region Spatial Data Fund and integrated RusGIS with System 112 in the Saratov, Kemerovo, and Murmansk Regions.
In 2018, we invested in enhancing our cloud-based video surveillance platform and expanded its functionality.
During the year, Rostelecom also launched cloud-based video analytics based on our proprietary modules and partner solutions for corporate customers. The service enables processing records from surveillance cameras, presenting the results as charts, reports, and diagrams which can then be used for addressing business tasks across a number of industries – forecasting sales, assessing the performance of advertising and marketing campaigns based on customer behaviour, monitoring employee behaviour at work, and task tracking in transport and logistics.
In 2018, Rostelecom became a leader in the B2B cloud-based video surveillance segment with 25 thousand connected IP cameras across more than 10 thousand organisations in all Russian regions.
We are planning to move to industry solutions supporting integration with ACS systems, smart gate bars, cash registers, and HR record keeping systems.
In 2018, we ran a major upgrade of our cloud-based Video Surveillance platform. In addition to the popular “Byt v plyuse” (“Plus Account”) bundle, subscribers now have access to new tariffs, a new recording option, and an extended list of supported devices and channels. This has been made possible through Rostelecom’s expertise and know-how in implementing online and offline video streaming projects of any complexity, which is unique for Russia.
In 2019–2020, we are planning to design a proprietary video player and promote our video analytics services. We will also continue to develop our web portal branding service and a mobile application on a white label basis as well as building an open-source API for integrating the video surveillance platform with customer external systems.
Rostelecom has continued to focus on the Smart City project covering integrated solutions in energy efficiency, transport, security, and environmental protection.
Energy efficiency of grids
Rostelecom has expanded the coverage of its energy efficiency projects, rolling them out to the Chelyabinsk Region, Perm Territory, and the Republic of Tatarstan in 2018. During the year, we installed over 100 thousand meters integrated into an intelligent automated metering system. The more important outcomes of our energy efficiency programme include lower commercial losses of electricity and improved payments by customers.
Street Lighting
In 2018, we designed projects to deliver additional energy savings at facilities that simultaneously employ different generation lighting systems. A project involving these solutions was first launched in Kirov, with similar projects started or implemented across 20 Russian regions by the end of 2018.
In 2019, we will complete the upgrade of our Street Lighting product, with plans to add new services, including infrastructure inventory, integration with a computer-aided design system, lighting level simulation, monitoring of energy service projects, and online energy consumption monitoring.
Safe City
In 2018, Safe City solutions were rolled out in six regions, with 11 more solution deployment contracts signed by the Company.
Rostelecom’s System 112 projects have made the most progress during the year. We have created new solutions as well as upgraded and provided maintenance for the existing systems, with similar projects implemented in almost all Russian regions.
In 2018, our priorities also included projects on emergency warning systems. In particular, we continued to roll out and upgrade our Automated Centralised Public Address System (ACPAS) across regions. The KSEONKSEON is an element of an emergency public address system, comprising a suite of software and hardware solutions used in public address systems and in natural and manmade hazard monitoring systems, and designed to inform and alert authorities responsible for the Single State Emergency Management System and the general public about emergencies in an automatic and/or automated mode. emergency warning system was also introduced in four regions.
Photo and video enforcement
As at the end of 2018, Rostelecom installed 1,932 traffic enforcement cameras (both photo and video) across 30 Russian regions.
We are planning to participate in designing the activities of the federal programme, Road Safety Improvement in 2013–2020.
Weight and dimension compliance
In 2018, Rostelecom implemented several weight and dimension compliance projects at regional motor roads. Rostelecom’s investment programmes also focus on WIM systems implemented as automatic weigh stations. They are equipped with enforcement cameras and enable real-time measurement, storage, and transmission of data about a vehicle’s type, speed, total weight, weight per axis, number of axes, and wheelbase as a vehicle passes a measurement spot without slowing down the vehicle. During the year, the project was implemented in 13 regions, with a total 47 automatic weigh stations installed.
Rostelecom is currently working on an integrated project that includes the adoption of an automated special permit system and integration between the regional and federal special permit systems.
Rostelecom has developed software solutions to automate educational processes, including a network of school library and information centres, an e-learning authoring tools, and a distance learning system.
A particular focus is made on general education programmes. The library catalogue includes over 2,000 fiction books, over 1,000 digital textbooks, and more than 300 e-learning materials.
As at the end of 2018, the solutions were rolled our across 11 Russian regions. A total of 3,500 schools and over 1,000,000 students and teachers have access to the educational content hosted by Rostelecom. In 2018, over 2,000 independent observers were trained through the platform’s services to monitor the Unified State Exam 2018. About 1,000 lessons were designed for the Russian E-School using e-learning authoring tools.
In 2019 and 2020, Rostelecom is planning to maintain its focus on the platform development while expanding its geographic footprint, adding upskilling courses for educators into its educational content portfolio, and augmenting the scope of content for secondary vocational education institutions.
With a 56%Source: TMT Consulting. market share, Rostelecom is the leader in the B2B segment among MVNO operators by revenue.
In 2018, the active subscriber base grew by 124% to 390 thousand subscribers, driven largely by strong sales across a number of key segments and a stronger focus on customer service level. The construction of base stations for Rostelecom’s customers was another growth driver for the segment.
During the year, we significantly expanded the range of supported and leasable equipment and enabled the construction of networks relying exclusively on Russia-made solutions.
For customers handling personal or sensitive data, we offer the service based on equipment certified in line with statutory requirements.
Rostelecom also offers analysis of equipment power supply status, enabling fast and reliable identification of over 70% of all incidents caused by unavailability of communication channels. We can now manage and support not only baseband equipment, but also customers’ local networks up to user workstation level. The upgrade and rebranding considerably increased our revenue from the product in 2018, up 71% year-on-year.
Rostelecom’s pilots in the power sector, oil production, and public utilities are implemented through partnership with the Industrial Internet Consortium (IIC). We are developing a cloud data storage and transmission solution as part of rolling out Rosseti Group’s unified smart metering and information system.
Rostelecom’s growth as an Operator for Operators serving mobile and fixed-line operators, as well as improving the telecommunications infrastructure and growing our footprint and market share in international routes, is part of our strategic vision. Rostelecom is planning to extensively leverage the segment’s potential to enter new niches and work in existing markets.
In 2018, our revenue from the B2O segment was up 2% to RUB 56 billion.
Rostelecom’s revenue from the Operator for Operators project launched in 2017 tripled during the year to RUB 1.1 billion. We are planning to ramp up the revenue to RUB 2.2 billion in 2019.
NaaS project
Rostelecom is connecting villages to its own fibre networks, including those built under the Bridging the Digital Divide (BDD) federal project. Contracts with MTS, MegaFon, and Tele2 Russia were signed for nine communities in 2018, with 60 more communities planned for connection during 2019.
Expanding transit backbone infrastructure
In 2018, we connected and commercially launched three 100 Gbps lines within the Transit Europe–Asia (TEA) cable system linking Europe to China via Mongolia. Rostelecom also completed a project to expand the TEA’s capacity by an additional 1 Tbps on sections between: Mongolia and China, the Russian boundary and China, and Russia and Japan via RJCN.The Russia–Japan Cable System is a 1,800 km network of submarine cables between Russia and Japan. Contracts have been signed for two new 100 Gbps lines out of the ten newly built lines. The remaining capacity is planned to be contracted in 2019–2020.
Cooperation with Tele2 Russia
In 2018, cooperation between Rostelecom and Tele2 Russia reached a new level: 90% of domestic long-distance (DLD) traffic and up to 80% of international long-distance (ILD) traffic was migrated to Rostelecom’s network. A considerable amount of international and domestic long-distance voice traffic of MVNO operators using Tele2 Russia’s infrastructure to operate their licences is also routed via Rostelecom’s network using the lines and equipment at our sites.
Rostelecom revamped its regional telecommunications networks, which enabled migrating 155 lines to our network from other operators’ networks, generating RUB 38.5 million in savings.
The IP transit service was launched for Tele2 Russia in Novosibirsk, Yekaterinburg, and Nizhny Novgorod, with the revenue from the service totalling RUB 43 million in 2018. Our plans for 1H 2019 include providing internet access services in Moscow and Saint Petersburg where Rostelecom is working on exclusive technical solutions for Tele2 Russia.
We have been consistently delivering customer service improvements across all customer segments.
In 2018, Rostelecom achieved significant progress in improving its customer service.
- The Online Customer Account (OCA) penetration increased by 71% while the number of automatic payments made by customers through OCA grew by 50% in 2018.
- Our partner network within our Bonus loyalty programme doubled during the year, and Rostelecom’s points can now be earned and used with more than 50 partners, including Ozon, M.video, Wildberries, Litres, and Netprint.
- In 2018, Rostelecom won a Loyalty Award Russia with The Secret of the Enchanted Tower game created for our customer loyalty programme.
- Rostelecom set up a network of self-service terminals installed across more than 300 Pension Centres. In 2018, over 40% of Rostelecom – Retail Systems’ payment traffic was migrated to the terminals, with the share of non-cash payments reaching 46% by the year-end.
- During the year, we offered our customers new payment services through ApplePay and MasterPass. In 2019, we are planning to launch GooglePay and SamsungPay payment options.
- Rostelecom extensively focused on
m-commerce service in 2018, in particular by extending the mobile payment service to 20 more merchants, including Moscow Parking, Odnoklassniki, and VKontakte. In 2019, we are planning to continue expanding our partner network and launch payments from a fixed-line account. - Scoring models were developed and launched to predict customer churn, with the percentage of churn-prone customers increased on average by 56% through improved model accuracy.
- Up to 4,000 customers use the Moving Online service every month to benefit from a seamless relocation experience within the area covered by the same Macroregional Branch. The service is planned to be further scaled up in 2019.
Online chat
Rostelecom continues to design tools for improving customer experience and measuring customer satisfaction. In 2018, we offered our customers an online chat service available in the customer account and in the mobile apps of the Smart Home and Online services, customer account of the Interactive TV service, on the web portal and in the customer account of Rostelecom Lyceum, as well as in the Sale Offices section at RT.RU.
When rating our customer service in chats, 85% of customers score our service as very good or excellent – 4 or 5 on a one-to-five scale.
The number of inquiries via the chat doubled year-on-year.
Customer satisfaction surveys
Since 2017, Rostelecom has been measuring NPS (Net Promoter Score) against eleven metrics. Compared to 2017, our NPS showed growth in nine out of the eleven metrics.
In addition to NPS scores for basic products such as data and TV, we extended the survey to recently launched products, including: Smart Home, Video Surveillance, Antivirus, and Wink. This list will further be extended in 2019.
In 2018, Rostelecom adopted Heat Maps for online customer service metric monitoring and an SQM (Service Quality Management) system to measure customer service in real time. Our customers now have access to our services via social media and UGCUser Generated Content – any meaningful content created and posted by users in various media. platforms across all macroregional branches. We have also ensured seamless inquiry routing between macroregional branches.