While most Russians are stuck with decades-old analog exchanges, businesses are getting hooked up to state-of-the-art communications systems.

Even the antiquated Russian telecommunications network is capable of pulling off some great surprises. Each year, when President Vladimir Putin holds virtual court with his citizens, calls come in from hundreds of distant villages and cities from across the former Soviet Union. One such event in 2002 logged more than 8,000 calls.

Such miracles are rare, and Russian businesses are increasingly aware of the need for reliable and modern communication.

Slowly, but surely, the telecom landscape is changing, and the Russian market now has a number of companies that hook clients up to modern digital and dedicated Internet lines. Most Russian households still use pulse-dial, analog telephones that work through exchanges that can turn a call abroad into a major exercise.

The digital communications and Internet market is booming at the moment, especially in Moscow and St. Petersburg. When renting premises for their business, a growing number of companies also want modern communications access from leading Russian telecommunications operators, and the competition is expanding between operators such as MTU-Intel, GoldenLine, Combellga and Korbina Telecom.

There are some 20,000 dedicated Internet lines in Moscow today, compared with about 6,000 in 2000. In St. Petersburg - the leader in high-speed Internet connections through old phone lines - the ADSL technology sales leader is WebPlus, a subsidiary of Telecominvest Holding.

Most of the increase in dedicated Internet lines is represented by broadband ADSL access.

Dmitry Dronov, marketing director at MTU-Inform, told The Russia Journal that alternative Moscow telecommunications operators using the 095 prefix have a dedicated telephone capacity of slightly under 1 million. "All the telephone-switchboard stations built after 1990 are digital," he said. "The digital-telephone market is still one of the most stable in the sector, with most growth coming through offering clients additional services such as Internet access, cable TV, virtual private networks, call centers, etc."

"Tougher competition and increasing demands from clients have made it necessary to consolidate resources, Dronov said, adding that the main players on the Moscow market today are MTU-Inform, Comstar, Golden Telecom and Combellga.

As for the Petersburg market, Mikhail Novikov, CEO and founder of ADMIN Ltd, said that "the main players on the digital lines client are PeterStar, Metrocom, Golden Telecom and WebPlus. They control 70 percent of this segment."

"All of these companies have links of one kind or another to the four big Russian telecommunications players: Svyazinvest, AFK Sistema, Alfa Group and Telecominvest. Another 100 or so small companies also offer digital-line services in Petersburg, the more notable among them being Comset, Admiral Telecom, Lanck, Matrix, St. Petersburg Telegraph, Red Net and Alcor Telecom."

The Petersburg digital-line segment is separate from fiber-optic and trunk lines, which are dominated by Rostelecom, TeliaSonera, Equant, Cable&Wireless and Telecominvest subsidiaries.

Corporate clients can choose from several main telecommunications solutions. The most popular option combines a good digital-telephone network with broadband Internet access.

The simplest option is to install a 2 Mbit/second capacity line divided into 64 Kbit/second slots that can be used to transmit any data. Transmitting a single telephone conversation over a digital line, for example, uses 64 Kbits/second, and so a 2048 Kbit/second capacity line can be broken down into 32 lines of 64 Kbit/second.

The number of dedicated lines has tripled over the last two years, with most of the increase represented by broadband ADSL line access. This kind of line costs from $1,000. Part of the capacity is allocated to the required number of telephone numbers, while the rest is used for permanent Internet access. The speed of the Internet connection is now slowed even when all the telephone lines are in use, experts said.

The advantage of this service is that it saves on technical resources, as a client uses the same telecommunications line for the telephone and the Internet. Additional telephone services, such as free access to intercity and international calls, conference telephony and incoming call information can also be bought with this package.

"For companies with high demand for data transfer, there is a range of solutions using leased lines," ADMIN’s Novikov said. "The total price for this kind of solution...starts at around $500 a month and can reach up to $10,000 a month. Similar services in Europe are usually 30-50 percent cheaper."

Operators usually provide digital-telephone services using their own digital networks based on modern switchboard equipment from companies such as Nokia, NEC and Alcatel and SDH fiber-optic networks. Rather than offering just one line, operators offer five to 10 lines for a price starting at $350. The greater the number of lines, the lower the price.

Alexander Gerstav, technical director for a consulting company, said there are added advantages, such the ability to obtain the needed amount of Moscow telephone numbers within three days of making the application, regardless of the office’s location in the city, as well as high-quality local, intercity and international connections.

"Operators usually provide a comprehensive service that means clients don’t have to go to several different organizations, as the operators themselves organize everything from designing and laying the cables to installing and servicing the equipment and company telephone station," Gerstav said.

Every client who signs a contract for this package of telecommunications services is also offered additional services, such as three-way audio-conferencing, incoming call signal and transfer of incoming calls to other telephones, including mobile phones.

Leased-line Internet access is also in vogue. A minimum capacity 64 Kbit/second line will cost $500 for installation and $120 in user fees. The main users are clients who need to be permanently connected to the Internet for business. This solution uses Frame Relay technology for Internet access and involves organizing a leased line between the client’s office and the Internet provider’s station. The operator not only organizes permanent Internet access for the client, but can also install and service-routing services.

Another service available is organizing remote services using a smart network, which can receive and handle telephone calls and also provide information over the phone to a large number of clients either automatically or with the help of the operator company’s telephone center. In this way, a company can set up a call center and automatic information service of its own, and create its own customer support services and hot lines.

The technology also makes it possible to conduct automated public-opinion surveys or telemarketing campaigns by phone.

So while most Russians may not be able to make calls using digital exchanges, telemarketers can now call them using the latest additions to the telecoms arsenal of Russian business.