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U S West Joins $40 Billion Project To Give Russians Basic Phone Service

October 7, 1994

ENGLEWOOD, Colo. (AP) _ U S West has joined a $40 billion project to provide more Russians with basic phone service.

The Englewood, Colo.-based company signed a joint venture agreement on Wednesday with Germany’s Deutsch Bundepost Telekom; France Telecom, Russia’s Rostelekom, and Russia Overlay Network, a local phone company.

Russia has about 10 phone lines per 100 persons, compared to 80 lines per 100 persons in the United States. The project’s 10-year goal is to improve Russian telephone access to 35 lines per 100 persons, U S West said.

The group plans to build digital telephone exchanges in Russia’s 50 largest cities, install 30,000 miles of fiber optic and radio relay lines, and add 10 million telephone lines, U S West said.

The estimated $40 billion cost of the project will include $14 billion from foreign investors, officials said. First Deputy Telecommunications Minister Alexander Krupnov said the potential Russian investment would be $800 million.

U S West said the deal calls for a four-month study to determine the true cost of the project.

The partners will create a new international company to build and operate the system. Russia will be the majority shareholder, and half of the equipment will be produced in Russia.

U S West already has invested $30 million in Russia over six years to build international gateway switches and the country’s first cellular phone network. Company officials said the value of its Russian holdings has grown to $100 million.

″It’s a vast market and it’s relatively untapped,″ said U S West spokesman Blair Johnson. ″If we can help bring it into the 21st century in terms of telecommunications, we think that’s a promising venture.″

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