The largest digital services provider in Russia

Rostelecom’s venture capital fund completes its first two deals

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The venture fund has invested in software development companies “Brain4Net” and “Raidix”

Moscow, Russia – March 22, 2016 – Rostelecom PJSC (“the Company”) (MOEX: RTKM, RTKMP; OTCQX: ROSYY), Russia’s national telecommunications operator, today announces that its corporate venture capital fund “CommIT Capital” has completed its first two deals, acquiring a share in the capital of two Russian software developers.

The fund has invested around RUB 200 mln to acquire:

  • 30% of Raidix – a Russian software developer for data storage systems; and
  • 20.3% of Brain4Net – a leading Russian software developer of Software Defined Networks (SDN) solutions and Network Function Virtualization (NFV).

Aleksey Basov, Vice-President of Rostelecom PJSC, commented: “Our first two Rostelecom venture capital fund transactions are part of our strategy to establish a long term technological advantage in the fast growing digital segment, and reduce Rostelecom's dependency on foreign technology providers. Our strategic partnership with Raidix will address both our current and future data storage needs. In addition, Raidix’s innovative solutions will provide customers with support for products requiring higher levels of load and fault tolerance, such as storage systems for virtualization infrastructure, content libraries, Big Data and back-ups.”

“Brain4Net’s SDN/NFV solutions will enable Rostelecom to gradually transform its network, optimize its network infrastructure and offer a more flexible and rapid delivery of new services to its customers. The company has high export potential and is well positioned to capture a significant market share in this new and promising segment.”

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For more information please visit http://www.rostelecom.ru/en/ir or contact:
Investor Relations Department
Tel. +7 (499) 995 97 80
ir@rt.ru

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Rostelecom (www.rostelecom.ru) is one of the largest national telecommunications operators in Russia and Europe. The Group operates in all segments of the telecommunications market and covers millions of households in Russia.

Rostelecom is an undisputable leader of the broadband and pay-TV markets in Russia with over 11.6 million fixed-line broadband subscribers and over 8.6 million pay-TV subscribers, over 3.4 million of which are subscribed to Rostelecom’s IPTV services. The Group generated RUB 297.4 billion of consolidated revenues, RUB 100.8 billion of OIBDA (33.9% of revenue) and RUB 14.4 billion of net income in 2015. The Group is a market leader in providing telecommunications services to government bodies and corporates of all levels. It is also an important innovator that provides solutions in the field of medicine, E-Government, cloud computing, education, security and housing & utility services. Rostelecom was assigned ‘BBB-’ and ‘BB+’ international credit ratings by Fitch Ratings and Standard & Poor’s respectively.

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Rostelecom Venture Capital Fund
CommIT Capital is a wholly-owned Corporate Venture Capital Fund of Rostelecom. CommIT Capital invests in and develops companies that offer unique competencies that complement and offer synergies with Rostelecom’s operations. The decision to establish Rostelecom Corporate Venture Fund was approved by the Board of Directors in May 2015. In September 2015, Rostelecom completed the first tranche of financing for the fund for a total amount of RUB 1.5 bln.

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Raidix (www.raidix.ru) is a leading software developer for data storage systems in Russia. The company offers a domestic software platform for the management of individual storage servers, as well as for building large, scalable high performance clusters for multiple storage nodes. The RAIDIX software products are based on the company's deep sector expertise, as well as its own proprietary algorithms and error-correcting data coding. Raidix is well represented in the international market, providing software solutions to storage vendors and systems integrators in Russia, USA, Canada, Germany, India, South Korea, China, Japan. To the present day, the company has installed more than 1000 storage systems in more than 30 countries. Raidix is a member of Skolkovo, Russoft Association and ARPP (Association of Software Developers). Raidix is the first and only specialized developer of storage solutions in Russia, whose software is included in the register of the Ministry of Communications as the software recommended for the purchase by state agencies under Article 12.1 of the Federal Law on Information, Information Technologies and the Protection of Information (https://reestr.minsvyaz.ru/).

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Brain4Net (www.brain4net.ru) is a SDN (Software Defined Networks)/ NFV (Network Function Virtualization) solutions provider, specialising in the development of data networks, network traffic, and virtualization application management systems. The company also provides consulting services to its partners and customers on the development of SDN/ NFV migration strategy and its integration with existing networks and OSS / BSS systems to ensure maximum efficiency from both new and existing investments. The company is a member of the Skolkovo innovation center. Brain4Net main customers include fixed and mobile operators, as well as large enterprises. Brain4Net solutions help to reduce CAPEX for network infrastructure deployment by 2-3 times compared to more traditional technologies. They also offer greater network control and reliability, while minimizing operating costs and accelerating the time required to bring new services to market.