February 1, 2008, Moscow: COMSTAR – United TeleSystems (COMSTAR-UTS, LSE: CMST), the leading provider of integrated telecommunication services in Russia and the CIS, announced the online auction conducted in the SETonline system for the right to sign a vehicle rental and transport services contract for the needs of MGTS JSC, COMSTAR-UTS JSC and COMSTAR-Direct CJSC. Three lots were offered for bidding with initial value of 39.3 million rubles, 369.9 million rubles and 42.1 million rubles respectively. The auction was declared as valid for two lots with the total initial value of 409.2 million rubles.
Four companies participated in the bidding. Elavius CJSC, which offered 29 million rubles for the contract, won the first lot – lease of foreign-made light-duty vehicles without drivers. RusAvto LLC, which offered 369.47 million rubles for the contract, won the second lot – lease of domestic-made light-duty VAZ vehicles with drivers and cargo-and-passenger vehicles.
The bidding for the first lot suggested the largest price decrease, 26.3% of the initial value, or 10.3 million rubles. 53 bids were offered for this lot, so there was a tough competition among bidders.
COMSTAR-UTS' members have been holding tenders in the SETonline system since November 2007. For this period, MGTS has held successful tenders for roof maintenance services, supply of oil products, office paper and food for employees. COMSTAR-UTS has also held a successful online auction with increasing bids to sell the company’s real assets.
Alexei Goncharuk, the Senior Vice President of COMSTAR-UTS, says “Online trades not only make the Group’s activities more transparent, they also enable to substantially lower the price of purchased goods and services. We are planning to use this form of auction to make the majority of corporate procurements. We have already involved COMSTAR-Direct and MGTS into these auctions, and we shall suggest the online tenders to our regional partners as well.”
Anton Emelianov, CEO of SETonline, underscores, “Purchase of integrated services using online auctions is a new step in development of the corporate e-commerce.” He believes that due to the successful tenders, online auctions are expected to become one of the main tools for corporate procurements as the large Russian businesses move toward a wider use of competitive purchase methods.
In 2007, COMSTAR-UTS became the leader of the National Procurement Transparency Rating with the highest Guaranteed Transparency grade according to the results of the previous year among corporate purchasers.
In 2007, the total volume of purchases made by COMSTAR-UTS with the online auction system exceeded 500 million rubles. The average saving due to decrease of the price during bidding was 10%. The companies have held tenders to purchase office paper, roof maintenance services, various goods to provide for normal operation of the Group’s offices, as well as cleaning and courier services.
In 2008, COMSTAR-UTS used the SETonline tender platform to hold online auctions to supply the promotional materials.
Online auction is a tender method for bids with decreased (or increased) value for goods and services where bidders can offer multiple bids. The bidder whose bid price is the smallest (or largest) wins the tender. Online tenders allow attracting the maximum attention of both customers and vendors, expand the product range, create an efficient and transparent competitive environment, decrease the time between the purchase notification and contract signing, they also make it possible to correct prices regarding the trading subject at any time.