President of Russia Vladimir Putin: How long have you held this post, Mr Oseyevsky?
Rostelecom President Mikhail Oseyevsky: Ten months.
Vladimir Putin: You see it’s almost your anniversary.
Tell me how you got up to speed on the company operations and how the company is doing and developing, in your opinion? Rostelecom is one of the key holders of the key infrastructure (sorry for repeating the same word twice) but this gives you an opportunity to be involved in another area as well, the Russian Digital Economy programme and digitisation.
You are said to be already taking the necessary steps in this direction. Can you please elaborate?
Mikhail Oseyevsky: Yes, Mr President. During 2017 we did indeed mainly focus on the development of the Digital Economy programme. We see it not only as a set of structured measures to transform the Russian economy but also as a document setting new strategic goals for the company. Therefore, we have updated our five-year strategy, and plan to concentrate on five main aspects.
First and foremost, we want to indeed focus on further development of the basic infrastructure that must generally ensure progress of the Russian economy. This infrastructure includes communications and data processing centres.
Secondly, expanding access of the public and businesses, primarily small and medium-sized businesses, to the internet and modern digital technology.
Thirdly, development of new industrial internet tools that primarily focus on the fundamental sectors of the Russian economy such as oil and gas production, industrial production, energy as well as agriculture. This technology operates with large amounts of data in order to improve a company’s efficiency.
The fourth aspect is the further development of e-government tools – primarily, at a regional level.
And the fifth is information security, cybersecurity, meeting the needs of the company itself and our customers.
Overall, we plan to invest over 300 billion rubles of our own funds in these programmes. An obvious priority is the further development of infrastructure. We will be developing trunk channels, including in the Europe-Asia corridor, where Russia has objective priorities because it is the shortest way. This is why we are actively cooperating with our international partners.
But the key priority is the development of internet access in residential districts. We are working with the largest regional developers to ensure optical network access to every flat by the completion of the building. Moreover, smart buildings are becoming increasingly popular. Its systems include reading meters installed in flats and in communal areas, as well as video monitoring of stairs and adjacent territory. I believe that this will become standard procedure when it comes to construction in the future. We plan to install this modern infrastructure in over 800,000 households every year.
We are implementing state programmes, in particular, a programme to bridge the digital divide, which provides for connecting small residential areas to the internet. We have implemented over one third of this programme and continue working on it.
As per your instruction, we are completing a project to connect healthcare facilities to high-speed internet. It includes over 14,000 healthcare facilities. Telemedicine is being actively developed and medical image archives have been established in over 20 regions. People can now have a medical check-up in a neighbouring clinic, following which their tomograms or angiograms are transmitted to a regional or federal centre for diagnosis by top professionals. Of course, this has substantially improved the quality of healthcare. We plan to develop this technology throughout Russia.
Under the Far East development programme, we plan to lay an underwater cable and connect the Kuril Islands. The exploration work has been completed. As soon as the weather allows (presumably, in May or June), the ship will begin working on this. The project will come to an end by the close of 2018 and the Far East will be covered by modern infrastructure.
Over the previous years, we have connected Sakhalin, Kamchatka and Magadan. We can see that the local residents use these modern devices extensively. We can see large prospects for the new technology development. For example, we have started testing 5G networks. This spring, Skolkovo, Innopolis and the Hermitage in St Petersburg will serve as testing grounds. We are preparing to move forward.
I would like to also inform you about our financial results. The company’s revenue in 2017 has grown and it will exceed 300 billion rubles. Our investment programme worth 60 billion rubles is fully funded and will return a net profit of around 13 to 14 billion rubles. We expect that the strategy will result in our revenue growing faster than the inflation rate.
Vladimir Putin: Your company has many partners in the Government. What are Rostelecom’s relations with relevant ministries and agencies like?
Mikhail Oseyevsky: True, the programme requires involvement of almost all the ministries, each focusing on its area. Of course, the Ministry of Communications is our major partner. Still, we also cooperate with the Healthcare Ministry and the Ministry of Education regarding e-learning, and with the Finance Ministry. Therefore, I think everybody is largely involved and understands the goals as well as the objectives that we deal with together.
Vladimir Putin: Do you require any assistance?
Mikhail Oseyevsky: Thank you, Mr President, but we are doing well.
Vladimir Putin: Good.