“Daughter” of Russian Railways engaged in the search of new strategies

TransTeleCom, a subsidiary of Russian Railways, has announced a competition to develop its strategy until 2021. To seek new ways operator has forced stagnation of the main markets for this country and its possible sale in the future

The competition for ideas

“TransTeleCom” (TTK, controls the backbone network of the Railways) needs a new strategy. Tender documents for the right of development is posted on the website of Russian Railways (monopoly owns 99.9% of the operator). The maximum contract price is 26.5 mln RUB. without VAT (million’s 31.27 rubles). In the specifications stated that the contractor will analyze the current status of the TTC business and competitors to evaluate market segments where the company and its shareholder value under a variety of scenarios.

It is also necessary to examine directions of development of the TTC. Among them there are: the provision of infrastructure partners, digital services, and also realization of complex integrators projects for the years 2017-2021. To develop a strategy is needed before the end of November this year, to coordinate with the Railways until 31 January 2017.

As explained yesterday in the TTC, the strategy should encompass three areas: in the b2b segment (corporate and governmental customers), b2с (mass market) and b2o (work with other operators).

In addition, the developer of the strategy will need to address the issue of expansion of cooperation of TTK with the parent company. The operator already involved in telecommunication projects and the launch of new services for the Railways. For example, in 2015, the company organized Internet access via Wi-Fi at railway stations, and this year is a pilot project to provide information and entertainment content to passengers on the route Moscow-Adler.

This is the second attempt by the TTC to develop a strategy. The first such order was placed in March of this year, however, the process does not end there. Why the company did not comment.

To look for new ways of business development the operator is forced, probably due to the plans of the parent company: Russian Railways have repeatedly stated desire to sell the TTR as a non-core company. It was planned, however, that in the case of such transactions the main asset of the operator backbone network, will remain in the ownership of the monopoly. “We aim to significantly strengthen corporate and state customers. Prospects for the development of our activity we also associate with the provision of telecommunications services and digital services for the Railways”, — said the President of the TTK Roman Kravtsov.

Yesterday in the Railways said that “until the development and approval of the development strategy of TTK the question of the sale of the company is not relevant.

System capitalization

Main market, as well as the broadband access market — key for TTK — now almost do not grow, says CEO Agency TMT consulting Konstantin Ankilov. “Continue to develop only those players who carries out active expansion, sources for organic growth is over, everyone is looking for new points of growth”, — said the expert. Under forecasts iKS-Consulting, in 2016 the market for broadband access will grow by 3.5% instead of 4.5% at the end of 2015. Estimates of the dynamics of the mainline market. In iKS-Consulting noted that “the only growing segment among traditional telecommunications services remains pay TV”. At the end of the year the market volume will grow by 6.5%, projected at iKS-Consulting.

“Prices are not rising, costs increase. Such problems faced by operators around the world. Natural trend care telecommunication companies in the direction of it services, content and other”, — said yesterday the President of “Interregional TransitTelecom” Yevgeny Vasilyev, speaking at a Telecom forum RBC. According to the President, “AKADO Telecom” Sergey Nazarov, the last 6-7 years, the subscribers refused from fixed telephony to cellular, and then came messengers, who began to put pressure on already cellular. Sergey Nazarov predicts the stagnation of the business of those operators who do not want to change.

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