Based on preliminary data, South Telecommunications Company generated Rub 539.9 million from value-added services in 2003, which represents a 76.7% increase over the past year. The value-added service component reached 4.1% of the company’s total tariff revenue structure.  The breakdown of value-added services was as follows:

-       ISPservices – 60.9%,   

-         VPN services – 16.7%,

-         ISDN services – 9.9%,

-         IP telephony services – 6.1%,

-         cable TV services - 2.0%,

-         other value-added services – 4.4%.

As for the regional breakdown of STC’s value-added services, five branches accounted for 87.8% in FY 2003: the Center for New Technologies (25.2%), Rostovelektrosvyaz (22.5%), Kubanelektrosvyaz (15.9%), Elektrosvyaz (14.4%), Volgogradelektrosvyaz (9.8%), and other branches (12.2%).

Moreover, the Center for New Technologies and Elektrosvyaz Stavropol krai generated 70.7% of ISP services and 93.8% of revenues from the construction of private corporate networks (VPN).

Kubanelektrosvyaz accounted for 60.2% of IP telephony services.  ISDN service provisioning is concentrated within the branches of Kubanelektrosvyaz (51.8%) and Volgogradelektrosvyaz (27.1%).  Svyazinform of Astrakhan region and Sevosetinelektrosvyaz accounted for 41.1% and 47.4% respectively, of aggregated revenues from providing value-added network services.  Cable television is provided onl by the Volgogradelektrosvyaz branch. 

Thus, the regional breakdown of STC’s value-added service revenues is marked by a high concentration in the South Federal District. Moreover, the company has is strongest presence in areas which have the highest levels of alternative operators. 

In 2004 South Telecommunications Company plans To generate Rub 0.87 billion in value-added services, which comprises 5.2% of its overall tariff revenues.  In 2004, value-added roll outs include further development of digital television cable, IP telephony, high-speed Internet access based on xdsl technology, services based on value-added networks, organization and introduction of call centers, as well as the development of an intra-zonal data transmission network and multi-service networks.