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Business news, 02.03.2004 11:43

Peterstar acquisition boosts ISP business

Peterstar logo Peterstar, one of the city's largest telecommunications operators, announced Friday it was purchasing 100 percent of ComSet Internet provider for half of ComSet's annual revenues. By acquiring ComSet, whose client base is growing by 12,000 per month, Peterstar will boost its market share in Internet services up to 24 percent. Peterstar also hopes to win the title of number-one broadband services provider in St. Petersburg. The deal shows that Russian web-access companies are growing as the demand for Internet services increases.

ComSet was owned by three individuals and was sold for $650,000. Business daily Vedomosti quoted Peterstar's financial director Artur Akopyan Monday as saying that ComSet had $1 million revenues in Internet services and comparable revenues in system integration projects. The low price of the deal can be explained by the fact that ComSet had been using Peterstar's infrastructure.

Peterstar, created in 1992, owns a fiber optic digital network with 2,000 kilometers of wire, Interfax reported. The total amount of investment in the network has exceeded $150 million. Peterstar's main shareholders are American company Metromedia International Telecommunications Inc. with a 71 percent share, and Telecominvest with 29 percent; its overall share in the telecommunications market is 34.5 percent.

It looks like most of the independent providers will be squeezed from the market, since they largely rely on suppliers of telecommunications infrastructure. Those suppliers have acquired a growing appetite for Internet services, which are becoming comparable to telephone services in revenues, Vedomosti said.

Natural monopolies and large alternative operators are actively expanding the variety of their services and purchasing independent providers, often with a discount. Smaller companies can protect themselves also via service diversification or by targeting new regions, Vedomosti concluded. Good examples are WebPlus and its new program in Telephone Cloning and Lank Telecom turning regional.

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