Teleset, the fixed-line telecommunications network venture operating in the Russian republic of Tatarstan, dialled up impressive financials for 2007 in a strategically eventful year to December.

From sales increased 69% to US$22.7m (£11.6m), profits burgeoned to US$8m. During the year, Teleset completed the integration of TNPKO, its first acquisition, boosting annual results, increasing network coverage and strengthening its platform for growth in Kazan, one of Russia’s top ten cities by population.

The group also made its first move outside of Tatarstan’s capital city, with the takeover of Svyazinvest, a fixed-line operator in Naberezhnie Chelny, the second-largest city in Tatarstan, for just over £5m – analysts expect the highly synergistic deal to enhance earnings in 2008.

Teleset’s fixed-line all-digital network provides the usual telephony services as well as broadband, VoIP and digital data transmission and storage for a regional market in its early stages of development. This leaves it well placed for growth, with internet penetration in Tatarstan running at less than 5% and the online services division having grown 104% last year. Such strong growth rates are expected to continue based on rapid gross regional product growth – up 8.7% last year – in Tatarstan.

Furthermore, management reports buoyant demand for the group’s services in both the residential and business services sectors, with broadband penetration increasing and internet traffic growing rapidly. Far flung though it may be, Teleset now has 11 years of consecutive profits growth behind it and the shares, while certainly high risk, could reward a punt.

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Teleset Networks	AIM	£27.57m	17.50p	0.00p
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