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Investor Presentaiton

Rostelecom 1 Cost cutting possibilities Operational expenses 15 Area for Optimization 58% of all OPEX 60%. Personnel Optimization 9% Manageable Infrastructure maintenance and development " costs 42% of all OPEX Non- manageable costs www.rostelecom.ru 8% Real Estate Management 8% Sales/Services / Purchasing 15% Other manageable Depreciation / leasing Other non- manageable ā˜ ā˜ Key Area for Optimization Outsourcing Centers of competence (reduction of management levels, functions centralization) New infrastructure Automatization Energy effectiveness - Current RE portfolio optimization to cut maintenance OPEX Possible sale of high-end properties (25% of all), lease of other access properties Centralized purchasing Balanced distribution channels
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