Rostelecom on Tuesday became the latest Russian telco to agree a deal to receive hundreds of millions of dollars in financing from China, enabling it to buy network equipment from Huawei.
The operator announced that it has signed an agreement with China Development Bank and Huawei that will see it receive long-term financing of u p to US$600 million (€536 million). It will use the funds to refinance debt and to carry out telecoms projects with Huawei, it said.
Last week rival MegaFon made an almost identical announcement. It too has secured $600 million in funding from China Development Bank with a view to procuring network equipment and services from Huawei.
Rostelecom pointed out that it has a longstanding relationship with Huawei, but said that this marks the first time it has received a credit line from China to finance projects with the vendor.
Huawei is involved in an ongoing fibre network rollout with Rostelecom and the pair are working together on the Kamchatka-Sakhalin-Magadan subsea fibre link, Rostelecom said.
"Raising funds from the Asian markets helps us to broaden our creditor base and diversify our debt portfolio, making it more balanced and sustained," said Ilya Ponomarev, director of Rostelecom’s finance department.
Like many other operators, Rostelecom is working on the diversification of its services portfolio, focusing on pay TV services and high-speed broadband, in addition to its core voice telephony offer.
The telco had 23.2 million local telephony customers at the end of June, down by almost 9% on the previous year and it added 300,000 broadband Internet customers to reach 11.2 million.
However, its TV business performed better; pay TV subscribers increased by 7% to 8.2 million, while IPTV customers were up 25% to 3 million.
The company’s mobile assets were wrapped into a joint venture with Tele2 last year.
