Opening the Lines of Communication
Burton, Jonathan, Chief Executive (U.S.)
Russia has significant barriers to political and economic reform, but James Hatt doesn't want a telephone call to be among them. As the CEO of $30.7 million Petersburg Long Distance, which provides local, long-distance, and international telephone service in the former Soviet Union, Hatt faces bigger problems than broken connections or busy signals: Russia's economy is faltering; growth is slow; fears of inflation continue to loom. And June elections could well return the Communists to power.
But even Communists use telephones. So, within a decade, PLD intends to provide wireless, satellite-linked telecommunications across the Russian Federation. Such expansion, aimed at small to midsized Russian businesses, will come through Moscowbased Technocom, PLD's 51 percent-owned subsidiary. PLD's other Russian joint ventures include PeterStar, St. Petersburg's only fiber-optic cable link.
The groundwork is being laid, but the going is tough. In 1995, PLD posted a net loss of $16.1 million, against a $10.9 million loss the year before. A hopeful Salomon Brothers report concluded last fall, "The longer-term potential of a comprehensive and reliable long-distance network throughout Russia should sustain significant revenue growth for PLD into the next century." To which an optimistic Hatt adds boldly, "We want to be the MCI of Russia. …