CenterTelecom

» see centertelecom.ru as it lived, on the wayback machine

~ the goodbye ~

On 1 April 2011 an inter-district office of the Russian Federal Tax Service in Saint Petersburg made a record in the Unified State Register of Legal Entities, and eight companies stopped existing. Rostelecom published the list the same day. CentreTelecom, SibirTelecom, Dalsvyaz, Uralsvyazinform, VolgaTelecom, North-West Telecom, the Southern Telecommunications Company, Dagsvyazinform. Between them they had carried the landline telephone service of most of the Russian Federation.

CenterTelecom was the largest of them and the one with the odd geography. It served the Central Federal District, which is the ring of regions around Moscow, and it did not serve Moscow. The city's lines belonged to the Moscow City Telephone Network and to Mostelecom, which stayed outside. So the company's territory was a doughnut with the capital punched out of the middle, running from Smolensk down to Voronezh, and its headquarters sat in Khimki just past the city limit.

The legal entity that died in 2011 was created on 20 June 1994 as the Open Joint-Stock Company Elektrosvyaz of the Moscow region. It was renamed CenterTelecom in 2001, and in 2002 it absorbed the operators of the Central Federal District in a single reorganization, more than a dozen of them, each a provincial telephone company with its own name and exchange buildings. Voronezhsvyazinform, Tulatelekom, Smolensksvyazinform, Lipetskelektrosvyaz. The lineage underneath goes back much further, to the Moscow postal telegraph district of the late nineteenth century.

Turkey had its own form of this arrangement and I grew up inside it. One state operator owned the copper, and for years the choice of who provided your connection was mostly theater performed on top of a line that belonged to somebody else. My first accounts were with TTNet and later with Turknet, and neither of them owned a centimeter of what they sold me. The Russian story is that arrangement run at continental scale and then deliberately reassembled into one company, which is the opposite direction from the one most of Europe was walking at the time.

~ the chronicle ~

~ the ring around moscow ~

By 2008 CenterTelecom was the fifth largest telecommunications company in Russia, behind Rostelecom and the three mobile operators. Revenue was about $1.1 billion. The payroll was 31,517 people, a number that tells you most of what the business actually was: copper in the ground across every region around Moscow, and the crews required to keep it working through winters that destroy infrastructure.

It traded on MICEX and RTS under the ticker ESMO, which was a leftover from the Elektrosvyaz Moscow Oblast days and never updated to match the name on the building. Svyazinvest, the state holding company, controlled 50.69 percent of the voting stock. The whole structure had been built in the 1990s as a temporary arrangement, to make a quarter of a nationalized telephone system saleable, and it was still in place fifteen years later.

~ the seven ~

The merger took nearly two years from the first government approval and was never really in doubt. A government commission approved the concept in May 2009. The Svyazinvest board formally launched it on 20 October 2009. Shareholder meetings through the summer of 2010 approved the swap ratios, Rostelecom's own annual meeting signed off on 26 June 2010, and shareholders who objected were bought out by that October.

In February 2011 the Russian financial regulator registered an additional issue of 2,216,163,000 Rostelecom ordinary shares with a nominal value of a quarter of a kopeck each. Those were the shares the regional companies' investors would receive. Trading in the old stocks was discontinued with effect from 28 March 2011, so by the time the tax office made its entry there was nothing left to trade.

~ the register entry ~

The striking thing is how little ceremony there was. There was no final broadcast and no last day of service. On 31 March you were a CenterTelecom subscriber and on 1 April you were a Rostelecom subscriber, and the dial tone did not change. The company died entirely on paper, in a tax office in a different city, in a register most of its 31,517 employees had never read.

centertelecom.ru no longer answers. Svyazinvest, the holding company that had owned it, was itself ordered merged into Rostelecom by a presidential decree of 24 March 2012 and struck from the same register on 1 October 2013, thirty months behind the subsidiaries it had been built to hold.

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