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Russia wants bigger state role in telecoms sector

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MOSCOW, May 12 (Reuters) - The government wants to play a bigger role in the telecoms sector by reforming telecoms giant Svyazinvest in a way that will allow it to expand aggressively in Russia and abroad, senior officials said on Tuesday. "The importance of control of telecommunications is obvious for everyone," Svyazinvest general director Yevgeny Yurchenko said during the Communications Ministry's annual meeting. 
"This is why the government is interested in increasing the share of its assets in this industry and their capitalisation."
He made his comments just hours after Deputy Prime Minister Sergei Ivanov told the same meeting that the government should deliberately strengthen its position in the telecoms sector.
The Russian state has increased its role in sectors ranging from energy to metals production in recent years.
The government is currently mapping out a long-term development plan for Svyazinvest, whose privatisation has been delayed by nearly a decade, in order to increase its efficiency and reveal the fair value of its assets.
Yurchenko, who was appointed general director of Svyazinvest earlier this year, suggested Russia could adopt the practices of some western European countries where state-controlled telecoms have a market share of 40 to 50 percent.
"There is a particular fact that Telenor, Deutsche Telekom and France Telecom are not only national leaders but expand aggressively abroad and get more than half of their revenues from international activities," Yurchenko said.
He said that Russia's state operator should not only maintain its positions but strive to tap new segments and improve its position on the mobile market where state-controlled operators have a 9 percent market share, or 12 million clients.
That compares with a market share of 28-30 percent held by 'The Big Three' carriers -- MTS, Vimpelcom and MegaFon.
In response to the global financial crisis, Svyazinvest is slashing its investment programme to 27 billion roubles ($829.5 million) from 70 billion roubles and cutting operating costs.
It has also agreed with banks on the extension of credit lines for its companies that would allow them to successfully sail through peak debt repayments of more than 15 billion roubles.
Svyazinvest controls seven regional fixed-line operators which provide local and inter-zone telecommunication services to individuals and corporate clients, as well as dial-up and broadband Internet services, data transfer, wired and air broadcasting and also lease communication channels. The operators include CenterTelecom, DalSvyaz, North-West Telecom , VolgaTelecom, SibirTelecom , Southern Telecommunications Company (UTK) and UralSvyazInform. 
Svyazinvest also has 51 percent of former long-distance monopoly Rostelecom.
Sistema's unit Comstar bought the stake in Svyazinvest for $1.3 billion in 2006, but a government decision on the privatisation of the remaining 75 percent minus one share has been delayed for years.
Last year, Communications Minister Igor Shchyogolev said the government saw no point in privatising Svyazinvest during the financial crisis.
According to media reports, a merger of the seven operators and Rostelecom is currently the main strategy of Svyazinvest's reform under consideration.
Last year, Comstar's parent company Sistema asked Russia to buy back a 25 percent stake in Svyazinvest.

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