Teleset Networks

Fixed-line telecoms operator Teleset Networks has joined AIM via an introduction at at 19.75p with Corporate Synergy as nominated advisor and Metropol broker.

The group, which operates in Kazan, the capital city of the Republic of Tatarstan in the Russian Federation, offers a range of fixed-line services to residential and business customers, including voice calls, broadband and dial-up internet access, through its all-digital network. Historic annual growth of tariffs has been between 15 and 20% at the company.

It currently serves five out of seven districts in Kazan and is looking to extend its coverage both organically and through acquisition of smaller competitors in the region. Chief executive Yiannis Demetriou is keen to extend operations to other cities on the same model, saying that the company is well-positioned to take advantage of the rapid growth in the area, having already achieved 19% of the voice transmission and 25% of the data transmission market in Kazan.

With a population of 1.2m, Kazan ranks in the top ten largest cities in Russia, and is undergoing a period of social and economic growth. In 2005 the average salary in the city increased 26.1% on the previous year, and with construction booming to cope with increased commercial activity and to provide more housing, Teleset’s plan is to make the most of the expansion.

Around 680,000 square metres of housing had been commissioned by the end of July 2006, compared to 629,000 for the whole of 2005. Teleset has now entered into a number of partnerships with property developers, in a bid to achieve exclusive contracts as telecoms provider for the new buildings.

The business is profitable, boasting profit before tax of $3.3m for 2005, on revenues of $9.4m. Although it is early days on the market for Teleset, the shares might reward a speculation.