Svyazinvest 

INFORMATION DEPARTMENT

119121  Moscow, 55 Plyushikha St. const.2,
tel.: (095) 727-0418, fax: (095) 727-0475;
e-mail: pr@svyazinvest.ru 

June 3, 2003                               Moscow

On June 3, 2003 a resolution was passed at the Board of Directors meeting of North Western Telecom to introduce the Oracle Enterprise Resource Planning (ERP) based on Oracle E-Business Suite and an agreement was approved whereby Open Technologies, which is Oracle’s official partner company on the Russian market, has been appointed the chief system integrator at Svyazinvest and its mega-regional companies (MRC).

So far the Board of Directors of all seven MRCs have approved introduction of the ERP system.  On May 28 this issue was raised at a board meeting of Central Telecom, Volga Telecom and Southern Telecom, on May 29 at Siberia Telecom and Far East Telecom, May 30 at Uralsvyazinform.  The entire Oracle E-Business Suite software package is to be phased in at Svyazinvest, its seven MRCs and their branches.

The ERP system is a fully functional solution which consists of 13 operative sub-systems offering a high degree of corporate automation.  In addition, the license for a full-fledged Oracle user, including annual support and VAT, costs less than a similar solution provided by SAP, which will make it possible to save over $7 million.

According to the draft plan of major actions aimed at phasing in enterprise the enterprise resource planning system at Svyazinvest and its seven regional subsidiaries, worked out by Accenture in partnership with Oracle, the entire implementation cycle is expected to take 3 – 5 years.  The strategy envisages phased introduction of the main ERP system modules.  In 2003 Svyazinvest will start phasing in the sub-systems to keep track of staff data and fixed assets.  In 2004 the plan is to finalize full-scale implementation of financial and accounting modules, followed by the logistics modules in 2005.

The implementation process will be executed in several stages, each of which involves preparing the master system and then replicating it at MRCs and regional branches.

The structure of Svyazinvest holding includes seven mega-regional telecommunications companies – Central Telecom, North Western Telecom, Volga Telecom, STC, Uralsvyazinform, Siberia Telecom, Far East Telecom, the Russian national long-distance and international operator Rostelecom, six telecom operators which did not take part in the mega-regional merger process and Giprosvyaz, a telecom industry engineering and design institute.  The companies hold licenses to provide local, long-distance and international telecom services, as well as data transmission, Internet, ISDN, wireless subscriber access and mobile communication inGSM, NMT-450, AMPS and DAMPS standards.  Over 364,000 people are employed at Svyazinvest subsidiaries and branches.

In 2002 Svyazinvest completed the process of unifying 72 regional telecom operators into seven mega-regional companies.  At present, the top management of Svyazinvest holding is focusing its attention on a corporate restructuring program which aims to create a system of management to drive efficient and dynamic growth of the enlarged telecom operators.  The core component of this corporate restructuring plan is the execution of projects involving the introduction of IT systems in the mega-regional companies.