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Russian Far East will enjoy better telephone services with EBRD support
A US$ 17 million (EUR 15.5 million) loan from the European Bank for Reconstruction and Development (EBRD) will help the New Telephone Company (NTC) to expand and improve the quality of telephone services for the people of Vladivostok and Primorski Krai in the Far East of Russia.
Primorski Krai has the least developed telecommunications infrastructure in the Russian Federation, despite being the major city of one of its more prosperous regions. Given the low level of telephone ownership coupled with high income in the region, there is significant unfulfilled demand.
NTC is the second private land-line service operator in Vladivostok, and also provides mobile telephone services. Through competitive tariffs and an improved service, NTC aims to attract approximately 50,000 local land-line subscribers in Vladivostok and 20,000 GSM subscribers in Primorski Krai by 2004.
At a signing ceremony in Seoul, South Korea, David Hexter, the EBRD’s Deputy Vice President, Banking, stated: "The EBRD’s loan and an investment by Korea Telecom will enable NTC to improve local land-line telephone services in Vladivostok at competitive prices and to offer GSM mobile telephone services throughout Primorski Krai."
"Telephone ownership in Primorski Krai remains among the lowest in Russia," added Mr. Hexter. Despite the financial crisis, there is still significant demand for telephone services in both Vladivostok and Primorski Krai. Financing from the EBRD and Korea Telecom will help NTC meet this demand."
The EBRD loan will be provided in two tranches, of US$ 12 million (EUR 11 million) and US$ 5 million (EUR 4.5 million). Additional financing is being provided by Korea Telecom in the form of an equity investment, new capital for the company’s expansion and management and technical support. The total project cost will amount to US$ 70 million (EUR 64 million) by 2003.
The expansion of NTC’s digital telephone network will also facilitate the development of business in Primorski Krai, which is a natural gateway for trade in the Russian Far East.
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