Letter from the President of PJSC Rostelecom

Dear friends,

Rostelecom is an established industry leader and Russia’s largest provider of digital services and solutions covering millions of households, social welfare organisations, and public and private entities.

Our 2018 Sustainability Report outlines our strategic sustainable development initiatives and key events and priorities, including volunteering and charitable projects.

The nationwide programme, Digital Equality, remains the key sustainability initiative of Rostelecom. The programme improves the quality of life for millions of Russian citizens by bridging digital divides and ensuring accessibility of communications services, first and foremost, for underprivileged and vulnerable groups such as senior citizens, children in orphanages, children in needy families, and children with special needs.

In 2018, we launched our new five-year strategy, focused on transforming Rostelecom into a digital company while remaining a key participant in the Digital Economy of the Russian Federation programme and implementing nationwide technological and IT projects to further consolidate our status as a digital partner of choice for households, business, and government customers.

Rebranding was a logical evolution of our transformation, which has reinforced the new image of Rostelecom as a digital leader in the Russian market that remains open to feedback and proposals from any stakeholder. People, society, and their aspiration for improvement and building a fundamentally better life remain at the heart of our brand’s mission.

During the year, Rostelecom significantly reinforced its position in innovative solutions for e-government systems, cyber security, data centres, cloud computing, biometrics, healthcare, education, and utilities.

We do not simply create products and services, we provide a safe and comfortable environment for denizens of the digital age, create new experiences, open opportunities for quality education and healthcare, help businesses grow, and help the government reach out to the people.

Rostelecom incorporates the United Nations Sustainable Development Goals (UN SDGs) into its operations in respect of environmental, social, and economic matters while applying regional, national, and global lenses. Our projects target various age groups, promote digital skills for employment and everyday life, encourage innovation to drive the digital economy, and develop digital healthcare while providing ultra-high-speed access to advanced, secure infrastructure and encouraging global communication between business and society — all with a strong focus on cyber security.

In 2018, we connected over one million new apartments and private houses to digitally empower Russian citizens so they could get the most from all the latest digital advances.

The nationwide project for bridging the digital divide, exclusively operated by Rostelecom, focuses on connecting small rural communities (with 250 to 500 residents) via modern high-speed communication lines. Russia is home to about 14 thousand of these communities, which consist of several million people altogether. The project enables people to access high-quality digital services wherever they may live.

Pursuant to an instruction of the Russian President, Rostelecom constructed a submarin e fibre-optic cable link to the Kuril Islands in 2018, with residents of three islands, Iturup, Kunashir, and Shikotan, now able to use high-quality digital services.

From 2017 to 2018, Rostelecom connected 9,000 healthcare centres, providing them with access to advanced telemedicine technology.

We continued to ensure cyber security for business, retail, and government customers. Rostelecom’s cyber security centres provide 24/7 online monitoring, instantly responding to threats and attacks as they emerge. Rostelecom strengthened its position in the cyber security segment in 2018 thanks to the professionals at Rostelecom-Solar and the launch of the Unified Cyber Security Platform during the year.

Rostelecom’s team, counting 129 thousand people, is central to driving our digital transformation and achieving our goals. We value every employee, encouraging them to grow professionally and build their digital skills, which is key to Rostelecom’s success. We build a positive working environment for our employees from the moment they begin their very first day at work with us. To further empower our employees, we offer a mentoring programme and have set up the Corporate Online University and Knowledge Management Department, with a mission to create a positive environment for continuous employee development across all functions and roles.

Rostelecom has in place the Long-Term Incentive Programme for 2020–2022 and a collective bargaining agreement outlining the benefits and social guarantees offered to employees. Our employees actively participate in volunteering and charitable initiatives, with as many as 3,500 Rostelecom employees regularly involved in volunteering projects.

On behalf of the Company, I would like to thank all contributors to Rostelecom’s sustainability programmes and projects in 2018. Strong collaboration and co-creation are key to improving the quality of life for all Russian citizens and embracing the new digital future.

Mikhail Oseevsky,

President of PJSC Rostelecom