Rostelecom to reduce estimate for net profit

Rostelecom to reduce estimate for net profit

State-owned Russian operator Rostelecom is reportedly planning to reduce its estimate for net profit by approximately 36% to $644.39 million.

According to a local news source, the company’s profit reached 32.7 billion roubles a year ago, and its net profit amounted to $1.09 billion in 2012. Rostelecom has estimated that profits for this year will be affected by a high a decrease in phone subscribers, in addition to delays in the country’s 3G launch.

Reuters reports that the company plans to compensate for the shortfall by saving on procurement of contractors and the optimisation of staff. It has prepared for a board meeting in August to present the plans.

The Russian operator named former cable TV boss Sergei Kalugin as its chief executive in what was a government forced leadership change in March.

Russian President Vladimir Putin criticised the company’s weak share price and its plans for the expansion of its mobile sector after being elected for a third term last year.