& cplSiteName &

Golden Telecom (GLDN)

Light Reading
Optical Stock Watch
Light Reading
3/10/2004
50%
50%

The Russian telecom market is on fire, and alternative operator Golden Telecom Inc. (Nasdaq: GLDN) looks to be taking advantage of that market. The company is set to announce its fourth-quarter and full-year 2003 results Thursday, with investors and suppliers looking for more good news from the business services player.

The Russian telecom market is benefiting from the improving health of the Russian economy in general. The country's GDP grew at about 7 percent in 2003 and is set to grow again by up to 5.5 percent in 2004, according to the Russian government. Monthly average wages have more than doubled since 2000, according to the Organization for Economic Cooperation and Development (OECD). Mobile services have been in particular demand in Russia, and cellular operators are investing for further growth (see Report: Europe Subs Top 100M and MTS Spends in Russia).

The market for corporate voice and data services is also growing strongly, according to analysts, and that's Golden Telecom's core sector. As the market has grown, Golden's business has burgeoned, and investors have seized on the upturn in the carrier's fortunes.

The chart below shows the dramatic rise in the operator's stock price that has seen its valuation nearly triple in the past year, from a 12-month low of $13.77 to a recent high of $34.65. The stock closed on Friday (March 5) at $34.45.



The carrier has managed to increase its revenues sequentially without sending its costs through the roof, resulting in steady and healthy quarterly net income, as shown in the following table.

Table 1: Golden Telecom Recent Key Financials (in Millions)

Sept 30 2003 June 30 2003 Mar 31 2003 Dec 31 2002 Sept 30 2002
Revenues $90,095 $80,762 $78,376 $76,784 $46,376
Operating Income $18,313 $17,399 $17,234 $14,314 $6,649
Net Income $12,506 $11,835 $12,820 $12,945 $7,879
Source: company data




It's not just growing organically, though. The company has been acquiring smaller operators in the past few months (see Golden Telecom Buys Sibchallenge and Golden Telecom to Buy Comincom). The Comincom acquisition from Telenor ASA (Nasdaq: TELN) saw Norway's incumbent operator take a near 20 percent stake in Golden (see Telenor Fattens Stake in Golden). Telenor recently acquired a further tranche of shares for $1.17 million to take its holding to 20.5 percent.

Even without further acquisitions, Golden's revenues should continue to rise as Russian businesses seek greater business ties with Western Europe and the U.S. and spend money on their growing networking needs, according to Camille Mendler at Yankee Group. "There's a great desire in Russia to do business with the West, and that's making Russia the sexiest telecom market in Europe just now," says the analyst. "Lots of Russian businesses need decent connectivity, and most of those are concentrated in Moscow and St. Petersburg."

That's exactly where Golden Telecom has deployed kit from Nortel Networks Corp. (NYSE/Toronto: NT) to build metro Ethernet networks (see Golden Telecom Builds Ethernet MAN and Russians Pick Nortel Optical Ethernet). "Those Ethernet networks should make money hand over fist," says Mendler.

The carrier has also been building out its broadband access capabilities, using wireless DSL kit from Airspan Networks to offer high-speed access in the country's third largest city, Nizhny Novgorod, and two other cities close by, Ufa and Khabarovsk. Golden Telecom's marketing director Andrey Shishlo has stated that further wireless DSL deployments will be announced this year, while another Airspan wireless local loop system is now in trials in Moscow.

Golden Telecom isn't the only Russian operator investing in new broadband access gear (see MGTS Is Russian Into DSL Upgrade and Ericsson Wins Ethernet DSL Deal).

The operator is also working with AT&T Corp. (NYSE: T) to target the financial sector. The two carriers are working together to provide access for financial institutions to the Swift secure IP network in Russia.

Despite all these achievements, Golden Telecom is seemingly not keen to discuss its development to date or its future plans. Numerous calls and emails to the operator have not been returned, and even its equipment providers have been asked not to disclose any information that doesn't appear in official press releases. Perhaps this week's earnings conference call will provide more detail about the operator's strategy and outlook for the coming year.

— Ray Le Maistre, International Editor, Boardwatch

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
Kicking off BCE 2017, Light Reading founder Steve Saunders lays blame for NFV's slow ramp-up and urges telecom to return to old-fashioned standards building and interoperability.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Infinera's Sales Director Paints Tech's Big Picture

6|21|17   |   4:14   |   (1) comment


Shannon Williams, Infinera's director of sales, shares how she achieves work's many balancing acts -- between her role and the broader company, today and tomorrow's tech and more.
LRTV Custom TV
SD-WAN Innovation & Trends

6|20|17   |     |   (0) comments


Versa CEO Kelly Ahuja discusses with Carol Wilson the current status and trends in the SD-WAN market, Versa's innovation around building a software platform with broad contextualization, and the advantages that startups can bring to the SD-WAN market.
LRTV Interviews
Ovum's Dario Talmesio on 5G in Europe

6|20|17   |   02:16   |   (0) comments


At 5G World 2017, Dario Talmesio, principal analyst and practice leader on Ovum's fixed and mobile telecoms European team, explains the emerging trends amongst European operators as they prepare for 5G.
LRTV Custom TV
Putting Power on a Pedestal

6|19|17   |     |   (0) comments


ARRIS's John Ulm says a major accomplishment of SCTE•ISBE's Energy 2020 program is increased focus on power cost and consumption, including inclusion of energy requirements in operators' RFPs and RFIs.
LRTV Custom TV
Gigabit Access: The Last-Mile Pipe for All Future Services

6|19|17   |     |   (0) comments


A Gigabit access platform being deployed today must be able to deliver all types of services to an increasing number of devices. A non-blocking architecture is necessary to support the ever-increasing growth in bandwidth demand. The Huawei Gigabit access solution is based on a distributed design that is fully scalable to deliver a unprecedented performance.
LRTV Custom TV
Key Factors to Successfully Deploy an SD-WAN Service

6|19|17   |     |   (0) comments


As service providers transition their SD-WAN solution from trials and limited deployments into production at large scale, there are important considerations to successfully operationalize these solutions and realize their full potential, without adding complexity, introducing uncertainty or disrupting current business operations. Sunil Khandekar, CEO and Founder ...
LRTV Custom TV
IoT Solutions: Rational Exuberance

6|19|17   |     |   (0) comments


IoT solutions are morphing from hype into viable business opportunities. Huawei has the platform and ecosystem support to help carriers successfully address new business opportunities in the IoT space.
LRTV Custom TV
Realizing ICN as a Network Slice for Mobile Data Distribution

6|19|17   |     |   (1) comment


Network slicing in 5G allows the potential introduction of new network architectures such as Information-centric Networks (ICN) as a slice, managed over a shared pool of compute, storage and bandwidth resource. Services over an ICN slice can benefit from many architectural features such as Name Based Networking, Security, Multicasting, Multi-homing, Mobility, ...
LRTV Interviews
Ovum's Mike Roberts on 5G Uptake

6|19|17   |   04:08   |   (0) comments


Mike Roberts, research director for Ovum's service provider markets group, explains why he has boosted his 5G subscriptions forecast.
LRTV Interviews
AT&T's Hubbard on Intersection of SD-WAN & MPLS

6|15|17   |     |   (0) comments


Rick Hubbard, SVP of Network Product Management for AT&T Business Solutions, discusses how AT&T's approach to SD-WAN fits in with its overall virtualization strategy, explains how SD-WAN can improve enterprise customers' use of the cloud and addresses the intersection of SD-WAN and MPLS.
Telecom Innovators Video Showcase
Keep Connected IoT Devices Under Control With Allot

6|15|17   |     |   (0) comments


Allot AVP of International Pre-Sales, Daniel Keidar, explains how communications service providers can protect infrastructure and service availability from flooding attacks caused by malfunctioning or bot-infected devices connected to their network.
LRTV Custom TV
ZTE 5G World Highlights

6|15|17   |     |   (0) comments


ZTE showcases its leading 5G innovations at 5G World in London.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Verizon Warns of $500M Hit From Yahoo Deal
Iain Morris, News Editor, 6/16/2017
ISP Startup Targets Disruption in US Suburbs
Mari Silbey, Senior Editor, Cable/Video, 6/15/2017
Can Comcast Beat Customer Hate With a Private Cloud?
Mitch Wagner, Editor, Enterprise Cloud, 6/15/2017
BT Tech Chief Makes Plea to 5G Chip Vendors
Ray Le Maistre, International Group Editor, 6/20/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Following a recent board meeting, the New IP Agency (NIA) has a new strategy to help accelerate the adoption of NFV capabilities, explains the Agency's Founder and Secretary, Steve Saunders.
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.