AGM – Annual General Meeting of Company’s shareholders

BoD – Board of Directors

CEO – Chief Executive Officer

CFO – Chief Financial Officer

COO – Chief Operating Officer

DLD – Domestic long-distance telephony

EGM – Extraordinary General Meeting of Company’s shareholders

FASPM – Federal Agency for State Property Management

IFRS – International Financial Reporting Standards

ILD – International long-distance

RAS – Russian accounting standards

VEB – Bank for Development and Foreign Economic Affairs (Vnesheconombank) State Corporation


ADR (American Depository Receipt) is a share of Company’s ordinary stock trading outside Russian Federation. Each ADR represents six ordinary shares of the Company (ratio 1:6).

ARPT (Average Revenue per Transaction) is calculated for a given period by dividing the Company’s revenues from Video-on-Demand transactions by the number of transactions during that period.

ARPU (Average Monthly Revenue per User) is calculated for a given period by dividing the Company’s revenues from a particular service by the average number of subscribers of this service during that period and dividing the result by the number of months in that period. The ARPU calculation includes VAS revenues and does not include revenue from installation services.

Backbone (network) is a part of computer network infrastructure that interconnects other large networks, providing a path for the exchange of information between different metro-class networks.

BDD (Bridging Digital Divide) project is the project targeted at a fulfillment of a contract signed with the Federal Communications Agency (Rossvyaz) on providing universal communications services, i.e. internet access, for over 13,800 settlements across Russia.

Bundling is offering several products for sale as one combined product. The bundled offers may include “double play” (any combination of the two out of three following services: broadband, pay TV and fixed telephony), “triple play” (broadband, pay TV and fixed telephony) and “quadro play” (broadband, pay TV, fixed telephony and mobile).

CAPEX (Capital expenditures) comprises Company’s cash flow from purchases of property, plant and equipment and intangible assets. Long-term assets obtained through business combinations are not included in the CAPEX calculation.

CDN (Content Delivery Network) is a large distributed system of servers deployed in multiple data centres across the Internet aimed to serve content to end-users with high availability and high performance.

FCF (Free Cash Flow) is calculated as net cash provided by operating activities less CAPEX. Starting from 2015 Proceeds from sale of property, plant and equipment will be included in the FCF calculation.

FTTx (Fibre to the building or Fibre to the home) is a broadband network architecture using optical fibre to provide all or part of the local loop used for last mile telecommunications.

GPON (Gigabit Passive Optical Network) – is a telecommunications network that uses point-to-multipoint fibre to the premises in which unpowered optical splitters are used to enable a single optical fibre to serve multiple premises. GPON technology enables Company to provide customers with the Internet speed up to 1 GB/s.

IaaS (Infrastructure as a Service) is a type of cloud computing in which a third-party provider hosts virtualized computing resources over the Internet.

IP/MPLS (Multiprotocol Label Switching) is a mechanism in high-performance telecommunications networks that directs data from one network node to the next based on short path labels rather than long network addresses, avoiding complex lookups in a routing table.

IPTV (Internet Protocol television) is a system that delivers television services using the Internet protocol suite over a packet-switched network such as a LAN or the Internet.

IRCs are former Interregional Telecommunications Companies that were merged into the Company on April 1, 2011 (OJSC SibirTelecom, OJSC CenterTelecom, OJSC Dalsvyaz, OJSC VolgaTelecom, OJSC NorthWest Telecom, OJSC Uralsvyazinform and OJSC Southern Telecommunication Company).

Joint Stock Companies Law is Federal Law of the Russian Federation NQ 208-FZ "On Joint Stock Companies" of December 26, 1995, as amended.

Last mile is the last part of the telecommunication network that delivers communications connectivity to retail customers.

Net Debt is calculated as long-term and short-term loans and borrowings (total debt) less cash, cash equivalents and other short-term investments.

Net Income is profit for the period attributable to equity holders of the Company.

OIBDA (Operating Income before Depreciation and Amortization) is calculated as operating profit excluding long-term motivation program accrual expenses plus depreciation, amortization and impairment losses of the Company. OIBDA margin means OIBDA as a percentage of revenue.

PaaS (Platform as a Service) is a category of cloud computing services that provides a platform allowing customers to develop, run and manage Web applications without the complexity of building and maintaining the infrastructure typically associated with developing and launching an app.

Pay TV is subscription-based television services provided by analog and digital cable, satellite television, digital terrestrial and internet television.

ROIC (Return on Invested Capital) is measured as net operating profit after tax divided by average invested capital.

SaaS (Software as a Service) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.

Subscriber is an individual or organization with a running contract who have used a service within a six month period according to at least one of the following criteria: traffic, subscriber fee accruals or payments.

TSR (Total Shareholder Return) is a measure of the performance of different companies’ stocks and shares over time. It combines share price appreciation and dividends paid to show the total return to the shareholder expressed as an annualized percentage. It is calculated by the growth in capital from purchasing a share in the company assuming that the dividends are reinvested each time they are paid.

VAT (Value Added Tax) is a tax applied (and was applied during the reporting period) at the rate of 18% in accordance with the Russian Tax Code.

VoD (Video-on-Demand) is a system that allows customers to select and watch content at any time convenient for them. IPTV technology is often used to bring VoD to televisions and personal computers.

VoIP (Voice over Internet Protocol) is a protocol optimized for the transmission of voice through the Internet or other packet switched networks.

VPN (Virtual Private Network) extends a private network across a public network, i.e. Internet. It enables a computer to send and receive data across shared or public networks as if it were directly connected to the private network, while benefiting from the functionality, security and management policies of the public network.

xDSL (Digital Subscriber Line technologies) means a technology enabling digital data transmission over local telephone networks.

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