Comstar – United TeleSystems Group of Companies was founded in May 2004 by merging Comstar, MTU-Inform and Telmos. In 2005, Comstar – United TeleSystems acquired the control stake in OJSC Moscow Local Telephone Network (MGTS) and CJSC MTU-Intel (presently Comstar-Direct) as a result of restructuring of JSFC Sistema’s telecommunications assets. That year also saw the Company embarking on an aggressive regional expansion and building up its presence noticeably in several Russian regions. The list of acquisitions included telecommunications companies in Tyumen, Tyumenneftegazsvyaz, in Saratov, Konversia Svyaz and TK Overta, and also in the Moscow region, Unitel and Kontrast Telecom.
In February 2006, Comstar – United TeleSystems conducted IPO trading and attracted 1 billion 60 million US dollars on the securities market. Such IPO result represents a record high among telecommunications companies both in Russia and the C.I.S. countries, being second-largest for the entire history of the Russian companies’ IPO trading at the London Stock Exchange and second only to parent company JSFC Sistema’s 1 billion 560 million US dollars.
IPO ushered in a new stage in the Company’s growth: the making of a nation-wide operator, the leader on the Russian telecommunications market. In 2006, the Company went through a major reorganization of the governance structure, commenced preparation for integration of MGTS’ and Comstar-Moscow’s NGNs, closed several major transactions to acquire assets within and outside of Russia with the aim to improve efficiency of its market operations.
In October, Comstar-UTS acquired Kiev’s communication operators, DG Tel and Technologicheskiye Systemy, entered the Armenian market by acquiring that country’s second-biggest telecommunications group, Callnet/Cornet. Several months before, in July, Astelit, an alternative operator providing communication services in Moscow and Saint-Petersburg, was acquired. In December 2006, an Agreement was signed with Intracom Holdings for Sale and Purchase of 51% stake in Hellas on Line, a leading Greek alternative communication operator. Comstar – United TeleSystems acquired the blocking stake in Svyazinvest on 13 December 2006 in the context of performing the obligations toward the investment community for an effective utilization of the funds attracted during the IPO.
Comstar-UTS finished by the end of 2006 reorganization of the governance system: the Corporate Center responsible for the strategic growth issues was established as an individual Unit at the Company, as were 5 Business Units (MGTS, Comstar-Direct, Comstar-Moscow, Comstar-Regions and Comstar-International), focused on development of the operating activities by the group’s businesses and on achieving their determined financial results.
Commitment to leadership, a groundbreaking approach in the field of technology and coherence in delivering the declared intentions are the key principles that Comstar-UTS practises in its activities.
In December 2003, MGTS declared the launch of a Network Rebuild Long-Term Program aimed at enhancement of the service offering, disposal of the social problems and reduction in the operating costs. As many as 42% of MGTS Exchanges were already digitalized by the end of 2006.
In April 2004, the STREAM brand, the Internet broadband access services designed for individuals, was introduced onto the market; in May 2005, the STREAM-TV Interactive IP-TV service was brought in commercial operation. With its 38% of the Moscow market, Comstar-UTS is currently Moscow’s biggest Internet broadband access provider.
In October 2004, the Wi-Fi Comstar project, aimed at establishment of Hot Spots in public places, was commissioned. In 2006, provision of the SMS-authentication service was commenced jointly with MTS. In 2007, a new service for establishment of Wi-Fi intra-office networks was introduced onto the market, and a Wi-Fi network was brought in commercial service in the Moscow subway.
In late 2006, a territorial integrated customer service center, the Company’s first, was unveiled, which demonstrated major improvements in the sales of services to individuals as early as in the first month of its operation. Comstar-UTS is contemplating rolling out a network of such centers during 2007, which will appreciably improve the level and rate of service to customers of all Group’s companies.
Comstar – United TeleSystems today is the third-largest telecommunications company in Russia and the C.I.S. in terms of capitalization, the leader on Moscow’s Internet broadband access market, and a major provider of multi-service telecommunications solutions.