In-Depth: Don’t offer without a phone

Mutual relations between builders and telecommunication companies are currently rather ambiguous. On the one hand, for a long time there has been a market and developed rules of mutual relations. On the other there are constantly contradictions between the commercial interests of developers and telecommunication companies.

In conditions of strict competition rapproachement between builders and operators is inevitable. Tenants and potential proprietors of commercial real estate demand the presence of telecommunication networks. For operators it is more profitable to work in corporate segemnt that provides a constant inflow of clients with fewer expenses. In connection with this they have to reconsider their own marketing policy, keeping possible competitors in mind.

It is currently possible to talk about three variants of existing telecommunication companies. The first is standard and popular because of the way it entered the telecommunication market with its foggy propects, but it spends minimal expenditures on labour. A telecommuniccation company comes to a premises after it has been put into operation. In this case the telecommunication company negotiates with a Union of Property Owners (if it is an apartment building) or the management company but not with the constructor. And in this case the results of the telecommunications company will depend on personal contacts or a tender.

The disadvantages of such an approach are abundantly clear: designing a cable network when you don't know the condition of the premises is difficult, a lot of time is spent on negotiating details, and then there is the technical side - installation of the equipment and network, after which you often need to paint and decorate again. And quite often there is a situation where some property owners have already chosen a telecommunications company with which they would like to cooperate with. In this case it is necessary to negotiate with every property owner separately, and with the telecommunications company, that renders services in the given territory.

Naturally, telecommunication companies want to come to the premises as soon as possible, i. е. right after delivery, agreeing with the Union of property Owners about the right to provide customers with communication services. Thus, the subscriber (the buyer of an apartment or the tenant of an office), of course, has the right to choose between MGTS and another commercial operator. And here the laws of healthy market competition are already operating.

An absolutely differnt situation is when communication companies are partners of the builder. The developer orders the telecommunication company to build a cable network. The telecommunication company comes to the premises together with the builder, lays cable networks, and when the property is sold the manager of the builder suggests the buyer of the apartment uses the services of its telecommunication company partner. In such cases the cost of communication services turn out to be essentially below market levels.

The result is everybody wins: the end user of services, the telecommunication company and the developer who gets additional competitive advantage of the product. In addition, the builder has the opportunity to conclude partner contracts with several operators, which allows him the freedom to offer services according to the needs of the client.

In this case the developer doesn't depend much on a particular telecommunication company's opportunities, might use different partners depending on the location of the premises, the spectrum of given services and the price policy of operators. It turns out, that the telecommunication company will have to find an opportunity to gain some additional competitive advantage, or adjust partner communications with the operators at the given premises. The best way is to do both.

Lastly, the third variant of existence is a telecommunications company of a large developer. This is a company in which production processes are initially built in the general structural business-process of creating the real estate object, starting with investments and finishing with further operation of the building. Only strong consolidated companies with highly competent staff can afford to work in such a complex structure, where the management of processes is stretched out.

The advantage of the given approach is that the telecommunication company possesses the full information on the premises at the approval stage of the project, allowing them to optimize the construction process of a telecommunication network, and to consider additional requirements, such as, for example, the presence of video observation systems. Already during the construction stage the telecommunication company does work on laying the external communication channels to the future building, performs design work in view of the wishes of the developer, and sometimes and the tenants who have already concluded agreements on areas under construction.

It is abundantly clear that the last variant allows to satisfy the needs of clients as much as possible: the granting of high quality telephony (including IP-telephony), the Internet, TV, and allocated communication channels. In addition such companies have an interest in providing high quality aftersale service that gives the client additional guarantees that are not dependent on the internal mutual relations of the developer and the telecommunications company.

As regards the advantages of this kind of structure for the company, it allows the telecommunications company to minimize risks and the developer to maximize profit. The end consumer as a result, like in the second variant, will receive quality communication services for below market prices.

There are a lot of companies that exist in this way in the market and, I believe, there are prospects in it. Especially since strict competition and the fight for end users by telecommunication companies, requires not only increases in investments in equipment and technologies, expenditures on advertising and investments in administrative resources, but also development of essentially new business processes.

Only a large company, which gives a good showing of itself on the market, with already formed partner communications, with everything necessary for approvals and licenses, possessing the necessary investment resources, can meet these requirements.

The importance of telecommunication companies for the developer is constantly increasing. The real estate market is beocming more and more active, and in connection with this there is a need for close, mutually advantageous cooperation between parties that will lead to very good reputations of temecommunication companies, an increase in the given services, and the opportubnities of joint development of projects. In view of this, in the near future, I think we will observe escalating interest in closer mutual relations between developers and telecommunication companies.

The author is the general director of Peresvet-Telecom (part of Peresvet-group). The article was written especially for Vedomosti. Material under the Points of View section does not necessarily coincide with the opinion of the editior.

Logic and logistics

Raisa Parshina

For Vedomosti

Every production or trading company in Russia dreams about its goods being transported quickly, securely and, of course, cheaply. Regarding this question, Industrialists and merchants find full support in the government.

The problem of decreasing transport costs in the final cost of production has been discussed for a long time at regional and federal levels. The social and economic development of regions, and the economic parameters of the state depend on it.

It is no secret that most cargo in Russia is transported by rail. The railway, as a matter of fact, is the skeleton of the Russian economy. But whilst developing the economy, we can't use the infrastructural possibilities that will appear in 2010. Unfortunately, the monopoly owner of the Russian railway infrastructure - Russian Railways - more often uses this deadline. The amount of investment projects are becoming more and more, and the deadlines further away.

Meanwhile, just recently, it was necessary to invest funds in the development of railway junctions at eastern ports of Russia. With Russian Railways starting to purchase share holdings in the ports of Russia, we can not hope that it will start development of the infrastructure in the immediate future. We expect that when Russian Railways will finish the financial operations phase and will move onto the real projects, it will be extremely difficult not only for railway operators, but also for the owners of cargo.

It is a question not only about Russian companies, but also international companies, which even more often use the sea, rather than the Trans Siberian railway, to transit goods. Even cargo from Asia intended for distribution in Russia is transported by sea to western ports, and then through the western borders of Russia arrives on the territory of the country and are distributed to cities by motor vehicles.

It is a vicious circle: goods aren't transited on the Trans-Siberian Railway because of high tariffs, and tariffs do not decrease because of the low level of the railway infrastructure.

In this situation it is impossible to answer a simple question: why is Russian Railways so reluctantly developing infrastructure? In fact the transportation of cargo by rail should be the main source of income for the monopolist. Another question is just as important - why is it so difficult to commission railway terminals constructed with private funds? It is probable that after the payment of shares in various joint ventures, Russian Railways does not have available assets remaining not only for the construction of new terminals, but also for the construction of tracks.

What prevents Russian Railways from accepting the investment help of private companies and to use new terminal possibilities, constructed with money from private investors? The Far East transport group knows about the problem of the bringing in of new railway terminals from experience. In the offices of Russian Railways for almost half a year, the coordinated commissioning of a multipurpose terminal in Zabaikalsk - on the busiest overland crossing of the Russian-Chinese border, still has not taken place. It is necessary to note, during the time The Far East transport group was building the terminal in Zabaikalsk, on the Chinese side a modern logistics complex has being developed. Russian Railways has probably decided to forget the obligations it took on in the development of the Russian part of the Manzhouli - Zabaikalsk.

The processes of globalization happening in the world, are fully apparent in the economy of Russia. Federal and regional authorities pay big attention to international investment projects. New factories are new workplaces, additional tax gathering and, as a consequence, increase the level of social development of the regions. However new factories bring new problems. For example, a great success of the administration of St. Petersburg was attracting automobile manufacturers - Toyota and Nissan to the region. Next year Toyota plans to open its factory, but the existing infrastructure does not meet the requirements of logistics. With the existing level of the railway network the new factory will not cope with the export of ready cars. This forces the administration of St. Petersburg and the management of Russian Railways to search for a solution on the development of the transport infrastructure so the inflow of multi-million strong investments won't be stopped because of that.

In the organization of international transportation by railway on the territory of Russia, one of the main problems is still the undeveloped infrastructure in the area of ports and at land border crossings. The complex process of getting approval documentation does not allow private Russian and international companies to realize the full investment potential in the development of logistics infrastructure. At the same time ports and border crossings are traditionally the largest logistic centers all over the world. Investment projects on the development of transport infrastructure in the world are some of the most capital-intensive. The mechanism of participation in such projects in each country varies, however the main principle everywhere is the same: first of all projects on the "narrowest" routes are realized.

The shortage of railway infrastructure at eastern ports of Russia has been talked about for a long time. Railway men complain about infringements of schedules in the loading and unloading of vehicles, about the excessive (in their opinion) use of port terminals as warehouses. Cargo owners, at same time, talk about the unpredictable and unthinkable consequences of the new administrative orders of Russian Railway and the uncertainty of the investment plans of the monopolist.

Having seen that the monopolist was not in a condition to solve the problems of the industrial enterprises and port terminals, some years back private companies offered the possibility for financing investment projects on the creation of new and repair of existing access routes to industrial premises and warehouses. This would allow Russian Railways to concentrate on projects connected with the development and operation of the main tracks. It would seem, the problem is not of a global character, but, having counted the number of manufacturers with their own tracks across Russia, many of which are exporters and importers, we have a huge sum of non-realized investment projects. At the end of 2006 the management of Russian Railways estimated the need for investments in 2007-2009 at 1.72 trillion rubles. Thus the estimated deficit in investment resources for this period is 281.4 billion rubles.

The largest world investors only look narrowly at a market on which the process of the reforming of a monopolist - Russian railway - proceeds. In these conditions it would be logical to create conditions for investment projects of Russian private companies. Let me remind you: private companies, by buying rail rolling stock, have invested more than 130 billion rubles in the economy of Russia, and more than 70 per cent of 250,000 train cars that belong to private Russian companies are new and were bought from Russian manufacturers.