CAPITAL INVESTMENT IN POST AND TELECOMMUNICATIONS IN THE USSR 1951-65

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• Sequence Number: 1
• Publication Date: February 1, 1960
• Content Type: REPORT

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ECONOMIC INTELLIGENCE REPORT
N? 87
CAPITAL INVESTMENT
IN POST AND TELECOMMUNICATIONS
IN THE USSR
1951-65
CIA/RR ER 60-5
February 1960
CENTRAL INTELLIGENCE AGENCY
OFFICE OF RESEARCH AND REPORTS
#Th
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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SECRET
ECONOMIC INTELLIGENCE REPORT
CAPITAL INVESTMENT IN POST AND TELECOMMUNICATIONS IN THE USSR
1951-65
CIA/RR ER 60-5
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
SECRET
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FOREWORD
The purpose of this report is to compile, analyze, and evaluate
capital investment* in those post and telecommunications facilities
and services in the USSR that are operated and controlled by the
Ministry of Communications. Other ministries operate functional
post and telecommunications systems such as those serving the armed
forces, shipping, railroads, and industry. Investment in these
functional and independent post and telecommunications systems is
not covered in this report. Although the facilities and services
covered are confined to those under the jurisdiction of the Min-
istry of Communications, their use is not so restricted. The armed
forces make abundant use of these facilities and services, as do all
other ministries. In addition, it is believed that the armed forces
make direct investment contributions to the Ministry of Communications
for the construction of facilities that are to be used to a large ex-
tent by the military. No information is available, however, on the
magnitude of these investment contributions, and no attempt has been
made in this report to quantify them.
Estimates of investment in telecommunications are presented in
two forms: as annual aggregates of total investment and as annual
investments by type of facility. In the absence of information, es-
timates of investment in postal services are presented only as annual
aggregative figures.
Estimates of annual investment in telecommunications were de-
rived by applying known and estimated cost data on telecommunica-
tions equipment and installations to known and estimated data on
growth in telecommunications facilities. Available data both on
growth of telecommunications facilities and on costs of telecom-
munications equipment and installations are spotty. On this basis,
therefore, it is estimated that the investment data presented in
this report have a probable margin of error of plus or minus 20
percent.
* Not all investment in the USSR is capital investment. All ref-
erences to investment in this report, however, refer to capital in-
vestment only.
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Summary and Conclusions
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CONTENTS
I. Introduction
II. Capital Investment Process
III. Growth of Investment
A. Investment in Public Post and Telecommunications,
1951-58
B. Investment in Public Post and Telecommunications,
1959-65
C. Ministry of Communications Investment Related to
Total State Centralized Investment, 1951-65
D. Marginal Capital-Output Ratio, 1951-65
IV. Influence of Intra-Bloc Agreements on Investment
V. Future Trends
Appendixes
Appendix A. Statistical Tables
Appendix B. Glossary of Technical Terms
Appendix C. Methodology
Page
1
6
8
12
13
23
35
36
42
14-7
63
71
Tables
1. Estimated Total Investment in Public
munications Facilities in the USSR,
2. Estimated Total Investment in Public
munications Facilities in the USSR,
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Post and Telecom-
1951-58 14
Post and Telecom-
1959-65 24
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Page
3. Investment by the Ministry of Communications as a Per-
cent of State Centralized Investment in the USSR,
1951-65 37
4. Estimated Capacity of Telephone Exchanges Operated by
the Ministry of Communications of the USSR, 1950 48
5. Estimated Length of Interurban Telephone Channels Oper-
ated by the Ministry of Communications of the USSR,
1950-65 49
6. Estimated Number of Telegraph Apparatus in Use by the
Ministry of Communications of the USSR, 1950-65 50
7. Estimated Number of Subscribers to the Subscriber Tele-
graph Network in the USSR, 1950-65 51
8. Estimated Number of Subscriber Telegraph Exchanges in
the USSR, 1950-65 52
9. Estimated Number of Cities Having Facsimile Service
in the USSR, 1950-65 53
10. Estimated Length of Wire and Cable Lines Operated by the
Ministry of Communications of the USSR, 1950-65 54
11. Estimated Length of Microwave Radio Relay Lines Operated
by the Ministry of Communications of the USSR, 1955-65 55
12. Estimated Number of Point-to-POint Radio Trsnsmitters
Under the Ministry of Communications of the USSR,
1950-65 56
13. Estimated Number of Amplitude-Modulated (AM) Radio-
broadcasting Transmitters in the USSR, 1950-65 57
14. Estimated Number of Wire-Diffusion Centers in the USSR,
1950-65 58
15. Estimated Number of Wired Loudspeakers in the USSR,
1950-65 59
16. Estimated Number of Television Centers and Television
Relay Stations in the USSR, 1950-65 60
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17. Estimated Revenue of the Ministry of Commu-
nications of the USSR, by Type of Service,
1951-65
Charts
Figure 1. USSR: Rate of Growth of Public Post
and Telecommunications Investment,
1951-65
Figure 2. USSR: Percentage Distribution of
Total Public Post and Telecommunica-
tions Investment, 1951-58
Figure 3. USSR: Percentage Distribution of
Total Telecommunications Investment,
1951-65
Figure 4. USSR: Percentage Distribution of
Total Public Post and Telecommunica-
tions Investment 1959-65
Figure 5. USSR: Average Annual Investment in
Public Post and Telecommunications
for 1951-58 and 1959-65
Figure 6. USSR: Rates of Growth of Total State
Centralized Investment and Ministry
of Communications Investment,
1951-65
Figure 7. USSR: Public Post and Telecommunica-
tions Investment and Increases in
Public Post and Telecommunications
Revenue, 1951-65
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CAPITAL INVESTMENT IN POST AND TELECOMMUNICATIONS IN THE USSR*
1251-65
Summary and Conclusions
The public post and telecommunications sector** of the Soviet econ-
omy is operated and maintained by the Ministry of Communications (Mini-
sterstvo Svyazi) of the USSRxxx and by the ministries of communications
of the republics. Investment in this sector is directed toward the de-
velopment of facilities that will provide services primarily to meet the
needs of government and only secondarily to meet the needs of private
consumers. Primary responsibility for the planning of capital invest-
ment in this sector rests with the Ministry of Communications, acting
in concert with the State Planning Committee (Gosplan). Before the
industrial reorganization in 1957, subordinate units of the Ministry
of Communications had little freedom of choice in proposing investment
plans responsive to local needs. After the reorganization, subordinate
units of the Ministry were given freedom to initiate investment plans
based on firsthand knowledge of their needs. To the extent that this
change is made to work, it could assist the local units to meet their
communications needs. If this end is not accomplished, at least the
change could serve to bring these needs into sharper focus at the higher
echelons than was the case heretofore.
The level and pattern of investment in public post and telecommuni-
cations in the USSR for the period 1951-58 were greatly influenced by
the rapid growth of economic and military activity in the country.
Communications requirements generated by this growth imposed increased
demands for service on the post and telecommunications system. As a
partial response to these increased demands, investment for the de-
velopment of post and telecommunications resources grew rapidly, but
* The estimates and conclusions in this report represent the best
judgment of this Office as of 15 January 1960. Technical terms are
defined in Appendix B, Glossary of Technical Terms.
** The term public.. in this report refers to the facilities and
services under the control of and operated by the Ministry of Commu-
nications of the USSR and the ministries of communications of the
republics. It does not refer to functional systems such as those
serving the armed forces, the state police, and other economic min-
istries not concerned primarily with communications.
XXX Hereafter referred to as the Ministry of Communications.
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from a small base. Total investment for 1951-58 amounted to about 9.8
billion rubles.* Expansion of facilities resulting from this invest-
ment led to substantial increases in the volume of service rendered.
Nevertheless, at the end of the period, supply of service, particu-
larly for mainline interurban communications, was still lagging behind
demand for service, and the post and telecommunications system was meet-
ing only minimal requirements for service in terms of normal Western
use patterns.
The Seven Year Plan (1959-65) for the post and telecommunications
sector underscores the effort to be made to overcome this lag. Total
investment is expected to be about 16.6 billion rubles for the 7 years,
about 69 percent greater than the total for the previous 8 years. The
average annual rate of growth** of investment, nevertheless, will be
less for the period 1959-65 than for the previous 7 years, or 6 per-
cent compared with 14 percent. The lower rate of growth for the period
1959-65, however, is heavily influenced by the progressive decrease in
investment for broadcasting facilities, which will be approaching full
coverage. The continued increase in funds planned for investment in
mainline high-capacity telecommunications facilities, such as multi-
conductor and microwave radio relay lines, throughout the period will
markedly reduce the lag in the supply of mainline communications serv-
ice that existed at the end of 1958. The accompanying chart shows
the estimated growth in investment for the sector as a whole and for
the subsectors during 1951-65.
Besides indicating a substantial increase in the amount of invest-
ment in public post and telecommunications, the Seven Year Plan also
indicates a major change in the pattern of such investment. For the
period 1951-58, investment was aimed primarily at expanding the capac-
ity of the post and telecommunications system by the application of
relatively inexpensive equipment to existing facilities. For the
period 1959-65, capacity will be expanded by investment which involves
the construction and installation of new, modern, high-capacity tele-
communications facilities. Major features of the Seven Year Plan in-
clude increasing the length of microwave radio relay lines 740 per-
cent, increasing the length of cable (multiconductor and coaxial)
lines 100 percent, increasing the length of interurban telephone
channels 190 percent, increasing urban telephone exchange capacity
50 percent, expanding the television broadcasting base 167 percent,
* Unless otherwise indicated, ruble values in this report are ex-
pressed in terms of 1 July 1955 rubles and may be converted to US
dollars at the rate of 6 rubles to US $1. 1/
** Average annual rates of growth expressed in this report are for
the period stated and are calculated at the compound interest rate,
based on the absolute figure for the year immediately preceding the
period stated.
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Million I July 1955 rubles
4,000
3.000
2,000
1,000
900
800
700
600
500
400
300
200
100
90
80
70
S-E-C-R-ET
Total 'Public Post. and.
Telecommunications Investment
-
Telephone and Telegraph ?
-Investm-trit-.
? 7
Broadcasting
" Investment ?
./.
// Postal Investment
coo
PERCENT OF CHANGE*
- *The slope of the lines of the graph, when related to this scale, gives an approximation
of the percentage change from one year to the next.
+50%
+25%
?25Z
?50%
?
I I I
60 I I I .1 I I I I I t
1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965
and enlarging the radiobroadcasting transmission base 60 percent.
Throughout the Seven Year Plan period, particular attention will be
given to the construction and installation of facilities that will
provide services to meet new requirements created by the recent in-
dustrial reorganization as well as by the over-all economic growth of
the country. It is expected that for the most part the goals of the
Seven Year Plan in the post and telecommunications sector will be met.
Total investment in public post and telecommunications in the USSR
consists of centralized investment by the Ministry of Communications
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and decentralized local investment. The chart below shows the com-
parison of the absolute and percentage contributions of each type of
investment with the total for the periods 1951-58 and 1959-65.
Billion July 1955 rubles
EINE Total Investment
1-1 Ministry of Communications Investment
1--1 Local Investment
8 YEARS (1951-58)
7 YEARS (1959-65)
Decentralized local investment will constitute a decreasing per-
centage of the total investment in public post and telecommunications
during 1959-65 compared with 1951-58, but the absolute amount will in-
crease. It is expected that decentralized local investment will con-
tinue to play a significant part in the development of the post and
telecommunications system, especially in meeting the needs of the
councils of national economy (sovety narodnogo khozyaystva sovnar-
khozy) under the industrial reorganization of 1957.
During 1951-58 the Ministry of Communications was allocated about
0.65 percent of total state centralized investment. During 1959-65
the Ministry will be allocated about 0.70 percent of the total. In
spite of this slight increase in the share of total state centralized
investment going to post and telecommunications for the entire period
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1959-65, there is no upward trend in annual allocations. The increase
in centralized investment funds that are allocated to post and tele-
communications development during the Seven Year Plan, therefore, does
not indicate an increased priority for post and telecommunications but
rather reflects the general increase in investment that is expected to
occur in the USSR during the plan period. The relative improvement ex-
pected in the post and telecommunications sector of the economy during
the course of the Seven Year Plan will be accomplished by a change in
the pattern of investment rather than by a change in post and telecom-
munications investment priority.
It is estimated that, for the entire period 1951-65, the marginal
capital-output ratio for the public post and telecommunications sector
of the Soviet economy will be about 1.5 to 1. Although this ratio in-
dicates a relatively high productivity of capital for the sector as a
whole, it is heavily influenced by the very favorable capital-output
ratios of the postal and broadcasting subsectors. Whereas the ratios
of the postal and the broadcasting subsectors for the period will be
about 0.7 to 1 and about 1.4 to 1, respectively, the ratio for the
telephone and telegraph subsector will be about 2.2 to 1.
Investment in post and telecommunications during 1959-65 will be
influenced strongly by intra-Bloc requirements for service. In 19572
under the leadership of the USSR, the Sino-Soviet Bloc established the
Organization for Cooperation Among the Socialist Countries in the Fields
of Post and Communications (OSS). The formation of this organization,
as well as the formation in 1957 of a similar organization for railroads
known as the Organization for Cooperation of Socialist Railroads
(OSZhD)? indicates an increased effort by the USSR to extend control
over other economic and military activities of the Sino-Soviet Bloc
as a whole through the secondary influence that service sectors exert
over the economy. OSS is concerned mainly with standardizing, ex-
panding, and integrating the post and telecommunications systems and
services of the member nations. The major objectives of OSS include
making the telecommunications systems of all Bloc countries partly
automatic by 1965 and fully so by 19752 accelerating telegraph traf-
fic between member countries, and establishing microwave radio relay
facilities for use in a Soviet Bloc telecommunications (including
television) network to be completed by 1965. It is not yet known
what amount of investment resources will be allocated by the USSR for
implementing its portion of the OSS program. Because the USSR was
the prime mover in the formation of this body, however, it is be-
lieved that sufficient funds will be made available jointly to ac-
commodate the program.
The plan for the development of public post and telecommunica-
tions resources in the USSR during 1959-65, although ambitious, is
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attainable. An adequate supply of equipment and materials is re-
quired, however, for its attainment. The inadequacies of domestic
production and of external procurement have been problems plaguing
the post and telecommunications sector since World War II. If the
necessary materials and equipment are forthcoming, this sector
should be capable by the end of 1965 of making a much fuller con-
tribution to the growth of the economy and to the strategic power
of the country than it has been able to make in the past.
I. Introduction
The distribution of investment in the basic service sectors of
an etonomy, such as transportation, electric power, water supply,
and telecommunications, usually reflects the need for balanced growth
of a modern industrial economy. The development of these sectors
is generally geared to the development of the industrial sector of
the economy. Depending on the planned directions of development
within an economy; some service sectors will be more rapidly de-
veloped than others. The telecommunications sector provides a
rapid means of controlling, directing, and coordinating diverse
economic activities. The effectiveness with which these activities
are integrated in time, space, and substance is influenced by the
quantity and quality of the telecommunications resource base. To
the extent that telecommunications resources meet the needs of an
economy, they contribute to the acceleration of the rate of economic
growth. Conversely) when these resources are incapable of pro-
viding services to meet such needs, acceleration of the rate of
growth may be impeded.
Since the end of World War II, there is probably no government
that has been more dedicated to rapid economic growth than the
government of the USSR. The eventual goal of this Communist state
world domination -- is predicated on the rapid development and ex-
pansion of its economy. It is strange, therefore, that Soviet plan-
ners have adhered to a policy of allocating relatively small amounts
of investment funds for the development of the telecommunications
sector.
Although reasons for this policy are not clear; it is believed
to be dictated by the availability of resources for the aver-all
development of the economy. During the early postwar years the
whole Soviet economy was rather chaotic in consequence of war de-
struction, obsolete equipment, and loss of trained manpower. The
lack of material and capital resources for the simultaneous develop-
ment of all economic sectors necessitated the establishment of in-
vestment priorities for sector development. These priorities
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emphasized the long-range development of the producer goods sector of
the economy rather than the service and consumer goods sectors. Invest-
ment priorities were established for the development of some parts of
the service sector, however, in relationship to the urgency of the need
for such services by the government. For the post and telecommunications
sector, these urgent requirements stemmed from the needs for service
of the Communist Party, the armed forces, the police, and the key
economic organs of government. It is pertinent to inquire, therefore,
whether or not the present post and telecommunications system meets
the several requirements of the state.
Judgments derived from this inquiry naturally will vary according
to the point of view from which they are made. From the point of view
of the planning.and decision-making authorities in Moscow, services
rendered by the post and telecommunications system are adequate. Be-
cause capital and material resources were limited, decisions for the de-
velopment of post and telecommunications were made on the basis of get-
ting necessary communications at the lowest possible cost. From the
point of view of the government, the post and telecommunications system
is adequate even though it meets no more than the most urgent needs of
government. Evidence indicates that in spite of numerous stresses
and strains the system appears generally able to meet governmental
requirements.*
From the point of view of the Ministry of Communications, the
present level of development of post and telecommunications is less
than adequate. Announcements by the Ministry repeatedly have empha-
sized the fact that existing facilities are inadequate to meet all
economic and military requirements and that available funds are in-
sufficient to build all the additional facilities judged to be needed.
Consequently, the Ministry of Communications has been requesting for
a number of years that the numerous functional telecommunications
systems of the country be placed under its control. According to the
Ministry, control of these facilities would allow it to meet more
fully its prescribed responsibilities in providing service to all
* Even the planning and decision-making authorities in Moscow have
been known to misjudge their economic needs. For example, the rail
transport crisis that occurred in the USSR during 1931-34, now his-
torically documented, was directly attributable to a shortsighted
policy. This policy placed heavy reliance on driving existing equip-
ment and personnel harder to meet the demand for rail freight trans-
port service rather than on allocating sufficient investment funds and
materials for the development of rail facilities in balance with the
growth of the economy as a whole. About 2 years were required to over-
come this crisis. 2/
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other sectors of the economy. The Ministry has achieved some measure
of success in acquiring control of the functional telecommunications
systems of the country. In February 1958 it was reported that the
Ministry of Communications had gained control of some mainline tele-
communications facilities of ministries abolished by the industrial
reorganization.
From the point of view of the sovnarkhozy, the post and telecommu-
nications system is also inadequate. Effective management of a region
requires direct telecommunications service within the region and with
other regions. At the time of the industrial reorganization in 1957,
local facilities were hampered by limited quantity, poor distribution,
and low capacity and were not capable of providing satisfactory service.
The Ministry of Communications has undertaken to improve and rearrange
existing telecommunications facilities to meet these emerging needs.
In spite of some gain the benefits derived from this action are con-
siderably less than adequate.
The post and telecommunications system is inadequate to meet gen-
eral public requirements, particularly for telecommunications, but in
the USSR the necessity to provide service for the general public is a
matter of secondary importance. Generally, the services that are ren-
dered to the public coincide with the interests of the state. Wire-
diffusion, radiobroadcasting, and television services, for example,
have become increasingly available because these mass information
media are used primarily for propagandistic purposes.
If the criterion of adequacy is the ability of the system to meet
all service requirements of the economy, including those resulting from
the industrial reorganization, then the system is unsatisfactory. The
system is undoubtedly inadequate if it is judged on the basis of its
ability to provide telecommunications service to the general public.
The system is probably adequate, however, if the criterion used is its
ability to meet only the urgent requirements of government, including
those of the Communist Party, the armed forces, the police, and the key
economic organs of government.
II. Capital Investment Process*
In the USSR, capital investment (kapital vlozheniya) is defined as
the financial and material resources allocated by central, republic, and
local budgets for construction of new plants and facilities and for
reconstruction and expansion of existing plants and facilities. Since
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1938, capital repairs have not been considered to be capital invest-
ment and therefore are not taken into account in the capital invest-
ment plan. Resources for capital repairs are realized in part from
amortization deductions, which are represented to be part of the unit
cost of production, and from profits accruing to enterprises from their
basic operations. This concept of capital investment applies to all
sectors of the Soviet economy, including post and telecommunications.LI/
Capital investment in the post and telecommunications sector of
the economy is divided into the following categories: (1) construction
work, including special construction projects; (2) purchase of evip-
ment for installation; (3) installation work; (4) purchase of productive
and nonproductive properties; and (5) other miscellaneous capital in-
vestment expenditures. 2/
Capital investments are classified as being above limit (sverkh-
limitny), below limit (nizhelimitnyy), or extra limit (vnelimitnyy).
Investment for construction subordinate to the Ministry of Communica-
tions is classified as either above limit or below limit according to
indexes established by the Council of Ministers of the USSR.* Generally,
above-limit investments are those for the construction of operational
facilities costing more than 10 million rubles and for the construction
of administrative facilities, except housing, costing more than 5 million
rubles. All other construction of Ministry subordination, includ-
ing housing, is considered to be below limit. All above-limit in-
vestment of the Ministry of Communications must be approved by the
Council of Ministers. This investment is included in the special
title list of above-limit construction of Gosplan. The Ministry of
Communications is authorized to approve all below-limit investments.
Investment for construction subordinate to the republic ministries
of communications is also classified as above limit or below limit.
The classification, however, is made at the discretion of the re-
public councils of ministers in accordance with the powers granted
them. Usually, construction costing 50 million rubles and more is
classified as above limit, whereas that costing less than 50 million
rubles is classified as below limit. The republic councils of min-
isters are authorized to approve all below-limit investment of republic
subordination. All above-limit investment of the republic ministries,
however, must be approved by the Council of Ministers. Such invest-
ment is also included in Gosplan's special title list of above-limit
construction.
* Hereafter referred to as the Council of Ministers.
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Extra-limit capital investment, as the name implies, is that not
limited by specific investment indexes. This type of investment is
used by republic ministries primarily for extending telephone serv-
ice to rural areas. Because such investment is financed outside the
state budget, prior approval by the Council of Ministers is not re-
quired.
Capital investment is either planned or unplanned. Planned in-
vestment is that which is included in the annual investment plan ap-
proved by the Council of Ministers, and such investment is financed
primarily by the state budget. Unplanned investment is that which
is not included in the annusl investment plan, and such investment is
financed by sources other than the state budget. Unplanned post
and telecommunications investment includes all extra-limit invest-
ment; investment financed by local budgets for construction of wire-
diffusion facilities in cities and workers' settlements; investment
made from special sources, such as the enterprise fund; and above-
plan investment made with funds accruing from the provision of ad-
ditional post and telecommunications services.
Before 1 July 1957 the planning of capital investment for the
development of the post and telecommunications sector of the Soviet
economy was primarily the function of the Ministry of Communications,
acting in concert with the central planning agencies* of the Council
of Ministers. Each year, at a time designated by these agencies,
the Ministry issued instructions to its subordinate enterprises
and republic ministries on methods and targets to be used in draft-
ing their capital investment plans. On the basis of these instruc-
tions, the republic ministries called for capital investment plans
from their subordinate enterprises. On receipt of these plans the
republic ministries revised, compiled, and submitted to the gosplans
of their respective republics and to the Ministry of Communications
drafts of capital investment plans. When these drafts had been
reviewed and amended, the Ministry compiled one capital investment
plan that was submitted to the Council of Ministers for approval.
On receipt by this government body the plan was reviewed in the
light of plans for the over-all development of the economy and the
available resources in the planned budget. After making the nec-
essary changes, the central planning agencies, acting for the
Council of Ministers, returned to the Ministry of Communications
the approved capital investment plan. The Ministry in turn for-
warded to its subordinate enterprises and to the republic minis-
tries the now approved capital investment plan. 2/
* Including the State Planning Commission (Gosplan), which was re-
sponsible for long-term planning, and the State Economic Commission
(Gosekonomkomissiya), which was responsible for current planning.
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Effective 1 July 1957 the economic-administrative structure of the
USSR was reorganized in an attempt to improve the functioning of the
economic system by shifting the responsibility and the authority for
day-to-day decision-making from more central authorities to more local
authorities. Fundamentally, the structure was altered by concentrating
long-term and current planning in Gosplan, by changing the functions
of or abolishing most central ministries, and by establishing govnar-
khozy to which were subordinated most industrial enterprises in the
region. One of the more important features of the reorganization was
the increased influence of Gosplan in planning and controlling the
economic activities of republics, ministries, sovnarkhozy, and enter-
prises. 22/
In the reorganization of the Soviet economy, 105 (now 104) new
economic regions were created, each controlled by a sovnarkhoz. This
replacement of the previous pattern of functional (enterprise-
ministerial) subordination by a regional subordination was intended
to facilitate and to improve the decision-making processes that af-
fected the over-all allocation and use of resources by giving local
units more authority and responsibility over activity at the enter-
prise level.
Many central ministries were abolished by the industrial reorgani-
zation, but, as would be expected of a service sector of nationwide
coverage, the Ministry of Communications was retained intact. The
power that the Ministry has in the area of investment planning has
also remained intact. Since 1954 the Ministry of Communications has
been a union-republic ministry with counterpart republic ministries.
In the 1954 reorganization the republic ministries and their sub-
ordinate enterprises were given a limited voice in planning capital
investments. Decisions on important aspects of the investment plan,
however, remained with the Ministry of Communications, which, acting
with the central planning agencies of the Council of Ministers, es-
tablished and approved general plan targets for post and telecommuni-
cations investment.
Coincident with the change in industrial organization were changes
in the planning processes. Before the reorganization, rigid guidance
for the preparation and tight prescriptions for the content of the
plan proceeded down the economic structure from the Ministry in
Moscow, through the republic ministries, to the subordinate units.
By the time the information had reached the subordinate units, the
substance of the plan had become so confined as to leave little
freedom on the part of these units to propose plan items responsive
to local needs. What freedom remained was subject to removal as
the plan proceeded back up the structure to the Ministry in Moscow
and thence to Gosplan. After the reorganization the preparation of
the plan commenced with the subordinate units. In this arrangement,
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subordinate units have the freedom to initiate plans based on first-
hand knowledge of their needs. Such planning is, of course, subject
to revision as the plan passes up the structure to the Ministry in Mos-
cow and then to Gosplan. To the extent that this change is made to
work, it could conceivably improve greatly the ability of subordinate
units to meet over-all economic production goals. Even in cases where
plan data are rejected or revised by higher echelons, they will bring
to those more remote echelons knowledge of on-the-spot problems that
before were not known or were ignored by the bureaucrats. 11/
III. Growth of Investment
The growth in Soviet economic and military activities greatly in-
fluenced the level and pattern of investment in public post and tele-
communications for the period 1951-58. This growth placed increased
demands for service on the post and telecommunications sector of the
economy. The program for the development of the post and telecommuni-
cations system during the Fifth Five Year Plan (1951-55) was a partial
response to these increased demands. During this period, some invest-
ment was directed at the construction of new facilities, but primary
emphasis was placed on expanding the capacities of existing facili-
ties through investment in relatively inexpensive equipment. Tele-
phone carrier equipment was installed on existing wirelines, tele-
type apparatus replaced slow-speed Badout and manual Morse equipment,
wire-diffusion facilities in the same area were consolidated, and the
length of postal routes was increased by the use of air and motor
transport. This program effected substantial increases in the total
volume of service that the post and telecommunications system was
able to render. Nevertheless, at the end of 1955, communications
service was still lagging behind demand, and the post and telecommu-
nications system was meeting only minimal requirements for service
in terms of normal Western patterns of use. 22/
The Sixth Five Year Plan (1956-60) of the Ministry of Communica-
tions was ambitious and addressed itself to overcoming this lag.
The plan emphasized the expansion of services through an intensive
program for the construction of additional basic telecommunications
facilities. Major features of the plan included the installation of
not less than 10,000 kilometers (km) of microwave radio relay lines;
the installation of 19,000 km of interurban cable trunklines, includ-
ing 2,700 km of coaxial cable lines; the construction of 75 major tele-
vision centers; and the installation of 250 frequency-modulation (FM)
radiobroadcasting transmitters. Although this plan was discarded in
late 1957, it guided post and telecommunications development during
1956-58. 11/
The industrial reorganization of 1 July 1957 imposed additional
demands for telecommunications service because rapid, reliable
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communications were necessary to tie together the diverse economic
activities placed under the control of a sovnarkhoz. During 1957
and 1958 these additional demands were partly met by improving and
rearranging existing facilities. Local resources primarily were
used for this purpose, with little investment by the Ministry of
Communications.
The new Seven Year Plan (1959-65) includes most of the objec-
tives of the original Sixth Five Year Plan. Under the new plan,
sizable amounts of investment funds will be allocated to the con-
struction of additional modern, high-capacity telecommunications
facilities. The level of investment planned for the construction
of these additional facilities underscores the concerted effort that
is to be made to meet current and future demands for service.
A. Investment in Public Post and Telecommunications, 1951-58
The estimated total investment in public post and telecom-
munications in the USSR during 1951-58 was about 9.8 billion rubles.
During this period, investment grew rapidly but from a small base.
The total annual investment, as shown in Table 1,* increased from
about 737 million rubles in 1951 to about 1.9 billion rubles in 1958,
an increase of about 155 percent.
The rate of growth in total investment in public post and
telecommunications for the period 1951-58, shown in Figure 1,**
varied from year to year. The moderate rate of growth shown for
the period 1951-53 was followed by an extraordinarily high rate of
growth in 1954. The increase in 1954 primarily reflected the in-
vestment needs associated with the expansion of point-to-point
radio facilities necessary for extending telecommunications serv-
ice to state farms and machine tractor stations established in that
year in the virgin lands of Kazakh SSR and Bashkirskaya ASSR. Fol-
lowing the increase in 1954, there was a slackening in the rate of
growth in investment, and during 1955 and 1956 the rate of growth
was comparable to that for the period 1951-53. The rate of growth
in investment during 1957 and 1958, however, again turned upward.
This increase reflects the starting of major projects under the
now discarded Sixth Five Year Plan.
Of the 9.8 billion rubles of investment in public post and tele-
communications during 1951-58, investment by the Ministry of Commu-
nications approximated 7.5 billion rubles. The remaining 2.3 billion
rubles were local investment. Investment by the Ministry, asxxx
Table 1 follows on p. 14.
*.* Following p. 22.
XX Text continued on p. 22.
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/*
1951-58
Million 1 July 195
Rubles
1951
1952
1953
1954
1955
1956 1957
1958
Postal investment y
110.6
121.6
130.7
178.9
196.1
207.6
247.6
281.9
Telecommunications investment sj
626.8
688.8
740.4
12.2112.
1,111.5
1,176.2
1,403.2
1,597.4
Telephone
103.7
140.5
130.7
180.3
137.1
139.3
139.3
139.3
Urban Id/
59.9
76.9
46.2
93.7
72.5
70.7
70.7
70.7
Manual
8.9
8.9
2.7
10.5
9.2
4.6
4:6
4.6
Automatic
51.0
68.0
43.5
83.2
63.3
66.2
66.2
66.1
Rural 2/
4.6
4.8
6.1
8.2
5.8
9.7
9.7
9.7
Manual
3.6
3.6
4.1
6.4
4.2
7.3
7.3
7.3
Automatic
0.9
1.1
2.0
1.8
1.6
2.5
2.5
2.5
Interurban 1/
39.2
58.8
78.4
78.4
58.8
58.8
58.8
58.8
Telegraph
26.7
14.3
14.1
26.7
13.9
30.2
32.0
32.0
Regular 5/
26.0
13.0
13.0
26.0
13.0
26.0
26.0
26.0
Subscriber)/
0.7
0.7
0.7
0.5
0.7
1.7
3.3
3.3
Facsimile i
N.A.
0.6
0.4
0.2
0.2
2.4
2.7
2.7
* Footnotes for Table 1 follow On p. 17.
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/
1951-58
(Continued)
Million 1 truly 1955 Rubles
1951
1952
1953
1954
1955
1956 1957 1958
Common telecommunications facilities
328.2
328.2
335.6
483.6
434.1
464.2
440.0
477.8
Wirelines 1/
292.3
289.4
292.3
309.7
309.7
367.6
330.0
367.5
Trunk and secondary
140.0
140.0
140.0
14o.0
14o.o
140.0
140.0
14o.o
Intrarayon
79.8
79.8
79.8
79.0
79.8
79.8
79.8
79.8
Multiconductor cable
72.5
69.6
72.5
89.9
89.9
107.3
110.2
110.2
Coaxial cable
N.A.
N.A.
N.A.
N.A.
N.A.
40.5
N.A.
37.5
Microwave L/
N.A.
N.A.
N.A.
N.A.
13.5
27.0
54.0
54.0
Point-to-point radio 1/
35.8
38.8
43.3
173.9
110.9
69.6
56.0
56.3
Long range
6.6
7.6
7.6
7.6
7.6
7.6
7.6
7.6
Intraoblast
2.5
2.5
2.5
2.5
2.5
2.5
2.5
2.5
Intrarayon
14.6
15.7
16.4
16.8
16.8
17.5
19.7
19.7
Urozhay (harvest)
12.2
13.0
16.8
147.0
84.o
42.0
25.2
25.2
Tropospheric scatter
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
1.0
N.A.
Ionospheric scatter
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
N.A.
1.3
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/
1951-58
(Continued)
Million 1 July 1955 Rubles
1951
1952
1953
1954
1955
1956
1957
1958
Broadcasting
89.9
127.5
181.7
244.6
448.1
412.2
626.9
748.7
Radiobroadcasting 2/
Wire diffusion
1.2
88.7
3.8
95.8
3.8
177.9
10.0
211.6
12.5
246.6
13.8
209.4
12.5
208.4
12.5
187.2
Urban pi
34.3
30.8
71.9
74.4
68.5
61.2
67.7
66.3
Wire-diffusion centers
N.A.
N.A.
2.5
2.8
1.7
3.2
6.2
10.8
Wired loudspeakers
34.3
30.8
69.4
71.7
66.8
58.0
61.5
55.5
Rural 2/
54.4
65.0
106.0
137.1
178.1
148.2
140.7
120.8
Wire-diffusion centers
17.0
17.9
13.3
14.0
12.1
7.7
6.5
11.3
Wired loudspeakers
37.4
47.1
92.8
123.2
166.0
140.6
134.2
109.5
Television 2/
N.A.
28.0
N.A.
23.0
189.0
189.0
406.0
549.0
Centers
N.A.
18.0
N.A.
18.0
144.0
144.0
306.0
414.0
Relay stations
N.A.
10.0
N.A.
5.0
45.0
45.0
100.0
135.0
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/
1951-58
(Continued)
Million 1 July 195 Rubles
1951
1952
1953
1954
1955
1956
1957
1958
Housing 2/ 78.3
Total public post and
telecommunications
78.3
78.3
78.3
78.3
130.3
165.0
199.7
investment E/ 737
8io
871
1L122
1,308
1,381!.
1,651
1,879
Ministry of Com-
munications in-
vestment E/ 606 E/
675 I/
760 I/
900
2/
1,100 z/
1,000
2/
1,100
2/
1,400 E/
Local investment E/ 2Y 131
135
111
292
208
384
551
479
a. All data are rounded to the nearest hundred thousand rubles unless otherwise indicated. Totals were de-
rived from unrounded data and may not agree with the sum of the rounded components.
b. Estimated on the assumption that telecommunications investment comprised 85 percent
ment and that the remaining 15 percent was postal investment.
c. Investment for each of the facilities was derived by applying known and estimated data on equipment costs
and installation to known and estimated data on telecommunications facilities, as shown below for specific
facilities.
of the total
invest-
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1951-58
(Continued)
d. The sum of investment in urban manual and automatic telephone facilities. Investment in urban manual
telephone facilities was computed by multiplying the growth of urban manual telephone exchange capacity, from
Table 4 (p. 48, below), by the average investment cost of 270 rubles per number. This figure for average in-
vestment cost includes both equipment and line installation costs, of Which 30 percent was estimated to be
equipment cost and 70 percent line installation cost. 12/ Investment in urban automatic telephone facilities
was computed by multiplying the growth of urban automatic telephone exchange capacity, from Table 4, by the
average investment cost of 945 rubles per number. The investment cost in one number served by an automatic
telephone exchange was estimated to be 3.5 times that in one number served by a manual exchange. 1.Y
e. The sum of investment in rural manual and automatic telephone facilities. Investment in rural manual
telephone facilities was computed by multiplying the growth of rural manual telephone exchange capacity, from
Table 4, by the average investment cost of 180 rubles per number. This average investment cost includes costs
of both equipment and line installation, of which 20 percent was estimated to be equipment cost and 80 percent
line installation cost. 11/ Investment in rural automatic telephone facilities was computed by multiplying
the growth of rural automatic telephone exchange capacity, from Table 4, by the average investment cost of
630 rubles per number. The investment cost in one number served by an automatic telephone exchange was esti-
mated to be 3.5 times that in one number served by a manual exchange. 114/
f. Computed by multiplying the growth of length of interurban telephone channels, from Table 5 (p. 49,
below), by the average investment cost of 196 rubles per channel kilometer. 1_9/
g. Computed by multiplying the growth of telegraph apparatus in use, from Table 6 (p. 50, below), by the
average investment cost of 13,000 rubles per apparatus. .22/ This average investment cost includes both
equipment and installation costs, of Which 60 percent was estimated to be equipment cost and 40 percent
installation cost.
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1951-58
(Continued)
h. Computed by multiplying the growth of subscribers, from Table 7 (p. 51, below), and the growth of sub-
scriber telegraph exchanges, from Table 8 (p. 52, below), by the average investment cost of 4,000 rubles and
2,500 rubles, respectively. El/ ,
i. Computed by multiplying the growth of cities with facsimile service, from Table 9 (p. 53, below), by
the average investment cost of 75,000 rubles per apparatus per city. It was assumed that there were two
facsimile apparatus in each city.
j. The sum of investment in trunk and secondary, intrarayon, multiconductor, and coaxial cable lines. In-
vestment in these facilities was computed by multiplying their growth, from Table 10 (p. 54, below), by the
average investment cost of 14,000 rubles, 1,330 rubles, 29,000 rubles, and 67,500 rubles, respectively.
7.
These average investment cost figures include both equipment and installation costs. 1
22
k. Computed by multiplying the growth of microwave radio relay lines, from Table 11 p. 55, below), by the
average investment cost of 27,000 rubles per kilometer. This figure for average investment cost includes
both equipment and installation costs. El/
1. The sum of investment in long-range, intraoblast, intrarayon, urozhay, tropospheric scatter, and iono-
spheric scatter point-to-point radio facilities. Investment in these facilities, except those for tropo-
spheric and ionospheric scatter, was computed by multiplying their growth, from Table 12 (p. 56, below), by
the average investment cost of 190,000 rubles, 25,000 rubles, 7,300 rubles, and 4,200 rubles, respectively.
These figures for the average investment cost include both equipment and installation costs. ELI Because of
obscurities in the data reported, investment in tropospheric and ionospheric scatter facilities was estimated
to be the minimum figure necessary to install the tropospheric scatter link between Frunze and Przheval'sk
and the ionospheric scatter link between Leningrad and Murmansk.
m. Computed by multiplying the number of amplitude-modulated (AM) radiobroadcasting transmitters placed in
operation, from Table 13 (p. 57, below), by the average investment cost of 1,250,000 rubles per transmitter.
This figure for the average investment cost includes both equipment and installation costs, of which 40 per-
cent was estimated to be equipment cost and 60 percent installation cost. 22/ The total investment in radio-
broadcasting does not include investment in frequency-modulated (FM) radiobroadcasting facilities, because
in the USSR most of these facilities are housed in the buildings of television centers. Because of
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1951-58
(Continued)
obscurities in the data reported, it was not feasible to allocate a portion of the total investment in major
television centers to FM radiobroadcasting.
n. The sum of investment in urban wire-diffusion centers and urban wired loudspeakers. Investment in urban
wire-diffusion centers was computed by multiplying the number of urban wire-diffusion centers installed,
from Table 14 (p. 58, below), by the average investment cost of 13,135 rubles per center. Eg Investment in
urban wired loudspeakers was computed by multiplying the number of urban wired loudspeakers installed, from
Table 15 (p. 59, below), by the average investment cost of 75 rubles per loudspeaker. 22/ These figures for
the average investment cost include both equipment and installation costs.
o. The sum of investment in rural wire-diffusion centers and rural wired loudspeakers. Investment in rural
wire-diffusion centers was computed by multiplying the number of rural wire-diffusion centers installed,
from Table 14 (p. 58, below), by the average investment cost of 5,151 rubles. Efi Investment in rural wired
loudspeakers was computed by multiplying the number of rural wired loudspeakers installed, from Table 15
(p. 59, below), by the average investment cost of 75 rubles per loudspeaker. 22/ These figures for the
average investment cost include both equipment and installation costs.
p. The sum of investment in television centers and television relay stations. Investment in television
centers was computed by multiplying the number of television centers placed in operation, from Table 16
(p. 60, below), by the average investment cost of 18 million nines. 2/ Investment in television relay
stations was computed by multiplying the number of television relay stations placed in operation, from
Table 16 (p. 60, below), by the average investment cost of 5 million rubles. These figures for the average
investment cost include both equipment and installation costs. Because of obscurities in the data reported,
investment in television centers includes investment in FM radiobroadcasting facilities.
q. Including state and local investment as well as investment in housing for postal workers. 21/ Data for
1958 were extrapolated, assuming the same absolute increase for 1957-58 as for 1956-57.
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Table 1
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1951-58
(Continued)
r. Rounded to the nearest million rubles.
t. Interpolated, using graphic analysis.
u.
v. 2il
x. Computed by subtracting investment by the Ministry of Communications from the estimated total investment
in public post and telecommunications facilities. The remainder was assumed to be local investment.
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shown in Table 1, increased from about 606 million rubles in 1951 to
about 1.4 billion rubles in 1958, an increase of about 131 percent.
During this same period, local investment increased about 266 percent,
from about 131 million rubles in 1951 to about 479 million rubles in
1958. The annual growth of investment by the Ministry of Communica-
tions, shown in Figure 11* was more consistent than that of local in-
vestment and for the most part paralleled growth in the total invest-
ment in public post and telecommunications. In 1956, however, in-
vestment by the Ministry decreased, whereas the total investment in-
creased. The decrease in investment by the Ministry is believed to
have mirrored the uncertainties that existed at the start of the
Sixth Five Year Plan.
Although investment by the Ministry of Communications during
1951-58 accounted for about 77 percent of the total investment in
public post and telecommunications, this proportion varied consid-
erably for individual years, as shown in Figure 2.* Investment
by the Ministry during 1951-55 provided about 82 percent of the
total investment, whereas during 1956-58 it provided only about
71 percent. This decline in the contribution of investment by the
Ministry to the total investment in public post and telecommunica-
tions reflected a change in the general economic policy of the
country. This policy gave increased emphasis to the role of local
investment in the aver-all development of the economy. In post and
telecommunications, this increased local investment made possible
the construction of new television, rural telephone, and housing
facilities.
It is estimated that during 1951-58 investment in telecommuni-
cations accounted for about 85 percent and investment in postal
services for about 15 percent of the total investment in public post
and telecommunications. The percentage distribution of the total
investment in telecommunications, shown in Figure 3,* varied
throughout the period. The most significant of these variances
occurred in investment in common telecommunications facilities and
investment in broadcasting facilities. During 1951-55, investment
in common telecommunications facilities, particularly wire and multi-
conductor cable lines, accounted for about 46 percent of the total
investment in telecommunications, whereas investment in broad-
casting facilities, especially wire-diffusion, accounted for only
about 26 percent. During 1956-58 the percentage relationship of
each type of investment to the total changed, with investment in
broadcasting facilities accounting for about 43 percent and
* Following p. 22.
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Million i July
/955 rubles
3,000
2,000
1,000
900
800
700
600
500
400
300
200
USSR
RATE OF GROWTH OF PUBLIC POST
AND TELECOMMUNICATIONS INVESTMENT, 1951-65
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Figure 50X1
--50%
1951-58 1959-65
? Total Public Post and Telecommunications Investment
?? Ministry of Communications Investment
Local Investment
1117::
1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965
* The slope of the lines of the graph, when related to this scale, gives on
approximation of the percentage change from one year to the next.
28304 2-60
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Million 1 July
1955 Rubies
2000,
1,500
1,000
500 ?
18%
737
USSR
PERCENTAGE DISTRIBUTION OF TOTAL
PUBLIC POST AND TELECOMMUNICATIONS INVESTMENT, 1951-58
UMTotal Public Post and Telecommunications Investment
Ministry of Communications Investment
FTLocal Investment
810
871
1,192
1,308
1,384
1,651
Figure 2
1,879
1951 1952
28305 2.60
1953
1954
1955
1956
1957
1958
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1951
1952
1953
USSR s
DISTRIBUTION OF TOTAL
TELECOMMUNICATIONS INVESTMENT, 1951-65
4%
34%X
52%.
627
2%
11%
19%
20%
Telegraph
1=1 Housing
r-?=11 Broadcasting
48%1
1689
Telephone
18%
24%
ri Common Facilities
45%1
11 Total Telecommunications
1740
1954 1847
11,014
1955 39%1141:
11,112
2%
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
10%
2%
31%
45%
11,176
11,403
2%
% 2X
11%
30%
14%
31
38%y9%
35%
11,597
11,783
16
29%
45%
11,842
27%
3%
22%
25%
21%
29%
46%
11,882
47%
11,952
45%.
12,007
42%
12,166
Figure 3 50X1
28306 2.60
12,467 50X1
1
I
I
I1
500
1,000
1,500
2,000
2.500
Million July /955 Rubles
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investment in common telecommunications facilities for only about 33
percent. The increase of investment in broadcasting as a percentage
of the total investment in telecommunications primarily reflected the
heavy emphasis placed on expanding the television broadcasting trans-
mission base of the country during the period as well as on the con-
tinued development of wire-diffusion facilities. The decrease of in-
vestment in common telecommunications facilities as a percentage of
the total investment in telecommunications resulted from decreased
investment in point-to-point radio facilities. Investment in wire-
line and microwave radio relay line facilities showed continued growth.
B. Investment in Public Post and Telecommunications, 1959-65
It is estimated that the total investment in public post and
telecammunicttions in the USSR for 1959-65 will amount to about 16.6
billion rubles, or about 69 percent more than in the previous 8 years.
The total annual investment, as shown in Table 2,* is expected to
increase about 38 percent during the period, increasing from about
2.1 billion rubles in 1959 to about 2.9 billion rubles in 1965.
Although the absolute amount to be invested during 1959-65
will be substantially greater than that invested during 1951-581 the
average annual rate of growth of investment, as shown in Figure 1,**
will be less rapid. Whereas the total investment in public post and
telecommunications for the previous 7 years grew at an average annual
rate of about 14 percent, the rate of growth during 1959-65 will
be only about 6 percent. The higher rate during 1951-58 reflects
the low level of investment at the beginning of the period.
Of the 16.6 billion rubles to be invested during the Seven
Year Plan period, investment by the Ministry of Communications will
account for about 14 billion rubles and local investment for about
2.6 billion rubles. These estimates are based on announcements
which state that investment by the Ministry during 1959-65 would
be more than double that during 1952-58. It is anticipated that
the annual investment by the Ministry of Communications, as shown
in Table 2,* will increase from about 1.7 billion rubles in 1959
to about 2.5 billion rubles in 1965, an increase of about 47 per-
cent. Although the absolute amount of total local investment during
1959-65 will be greater than that during 1951-58, the annual local
investment during 1959-65 will increase only slightly, from about
397 million rubles in 1959 to about 402 million rubles in 1965. The
annual investment by the Ministry during 1959-65, shown in Figure 1,**
will be somewhat more consistent than the annual local investment.XXX
* Table 2 follows on p. 24.
** Following p. 22, above.
XX Text continued on p. 33.
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/*
1959-65
Million 1 Ju4 1955 Rubles
Postal investment 12/
1959
1960
1961
1962
1963 1964 1965
314.6
325.0
332.2
344.4
354.2
382.1
435.4
Telecommunications investment 2/
1,782.8
1,841.8
1,22,1
1,951.7
2,006.8
2,165.5
2,467.1
Telephone
188.5
229.0
260.7
306.5
338.1
470.5
726.1
Urban le/
78.2
97.9
109.4
133.7
144.4
178.2
213.8
Manual
3.5
2.4
1.6
1.4
0.8
0.5
0.3
Automatic
74.7
95.4
107.7
132.3
143.6
177.7
213.6
Rural 2/
12.3
13.5
14.1
16.0
17.3
17.9
22.3
Manual
7.2
7.2
7.2
7.2
7.2
7.2
7.2
Automatic
5.1
6.3
6.9
8.8
10.1
10.7
15.1
Interurban 1/
98.0
117.6
137.2
156.8
176.4
274.4
490.0
Telegraph
39.3
48.1
56.9
62.4
66.5
70.8
73.5
Regular 5./
26.0
26.0
26.0
26.0
26.0
26.0
26.0
Subscriber h
12.1
20.9
29.7
35.4
39.8
44.2
47.0
Facsimile i
1.2
1.2
1.2
1.0
0.8
0.6
0.4
* Footnotes for Table 2 follow on p. 27.
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/
1959-65
(Continued)
Million 1 Julr 1955 Rubles
1959
1960
1961
1962
1963
1964
1965
Common telecommunications facilities
701.3
769.4
842.6
885.7
934.3
976.3
1,036.0
Wirelines jJ
512.6
571.6
623.4
664.2
700.2
729.4
782.7
Trunk and secondary
197.4
224.0
252.0
280.0
294.0
294.0
308.0
Intrarayon
77.1
106.4
119.7
119.7
119.7
119.7
119.7
Multiconductor cable
210.0
215.0
230.0
245.0
270.0
300.0
340.0
Coaxial cable
28.1
26.2
21.8
19.5
16.5
15.8
15.0
Microwave Lc/
129.2
143.5
172.2
177.9
195.2
215.2
229.6
Point-to-point radio 1/
59.5
54.2
46.9
43.5
39.0
31.6
23.7
Long range
5.7
4.6
3.4
2.5
2.3
1.5
1.0
Intraoblast
5.8
5.2
4.8
4.2
3.5
2.8
1.2
Intrarayon
21.2
17.5
16.1
13.1
11.7
8.0
4.4
Urozhay (harvest)
25.2
25.2
21.0
21.0
16.8
12.6
8.4
Tropospheric scatter
1.0
1.0
1.0
2.0
4.0
6.0
8.1
Ionospheric scatter
0.7
0.7
0.7
0.7
0.7
0.7
0.7
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR 2/
1959-65
(Continued)
Million 1 July 1955 Rubles
1959
1960
1961
1962
1963 1964 1965
Broadcasting
677.7
647.4
594.o
573.1
547.9
530.8
516.6
Radiobroadcasting 11/
12.5
12.5
12.5
12.5
12.5
12.5
12.5
Wire diffusion
193.2
162.9
134.0
113.1
93.4
76.3
62.1
Urban E/
46.0
28.9
16.2
12.6
7.2
3.6
2.7
Wire-diffusion centers
7.7
4.9
2.7
2.1
1.2
0.6
0.5
Wired loudspeakers
38.2
24.0
13.5
10.5
6.0
3.0
2.2
Rural 2/
147.2
134.0
117.8
100.5
86.1
72.7
59.3
Wire-diffusion centers
31.7
29.0
25.5
21.7
18.6
15.7
12.8
Wired loudspeakers
115.5
105.0
92.2
78.8
67.5
57.0
46.5
Television 11/
472.0
472.0
447.5
447.5
442.0
442.0
442.0
Centers
285.0
285.0
266.0
266.0
266.0
266.0
266.0
Relay stations
187.0
187.0
181.5
181.5
176.0
176..0
176.0
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
. in the USSR 2/
1959-65
(Continued)
Million 1 July 1255 Rubles
Housing 45/
Total public post and
telecommunications
1959
1960
1961
1962
1963
1964
1965
176.0
148.0
128.0
124.0
120.0
117.0
115.0
investment I/
2,097
2,167
2,2111
2,296
2,361
2,548
2,902
Ministry of Com-
munications in-
vestment E/ 1/
1,700
1,800
1 850
1,950
2,000
2,200
2,500
_Y
Local investment 1.1 2/
397
367
364
346
361
348
402
a. All data are rounded to the nearest hundred thousand rubles unless otherwise indicated. Totals
were derived from unrounded data and may not agree with the sum of the rounded components shown.
b. Estimated on the assumption that telecommunications investment comprised 85 percent of the total
investment and that the remaining 15 percent was postal investment
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1959-65
(Continued)
c. Investment for each of the facilities was derived by applying known and estimated data on
equipment costs and installation to known and estimated data on telecommunications facilities, as
shown for specific facilities. For the most part, the data used on equipment costs and installa-
tion were the same as those used for 1951-58. Some adjustments were made, however, to account
for the higher cost of more modern facilities planned for installation during 1959-65. Most
important of these were multiconductor cable, coaxial cable, and microwave radio relay.
d. The sum of investment in urban manual and automatic telephone facilities. Investment in urban
manual telephone facilities was computed by multiplying the growth of urban manual telephone ex-
change capacity, from Table 4 (p. )48, below), by the average investment cost of 270 rubles per
number. This figure for the investment cost includes both equipment and line installation costs,
of which 30 percent was estimated to be equipment cost and 70 percent line installation cost. .E/
Investment in urban automatic telephone facilities was computed by multiplying the growth of urban
automatic telephone exchange capacity, from Table 4, by the average investment cost of 945 rubles
per number. The investment cost in one number served by an automatic telephone exchange was esti-
mated to be 3.5 times that in one number served by a manual exchange. 2/
e. The sum of investment in rural manual and automatic telephone facilities. Investment in rural
manual telephone facilities was computed by multiplying the growth of rural manual telephone ex-
change capacity, from Table 4, by the average investment cost of 180 rubles per number. This
average investment cost includes costs of both equipment and line installation, of which 20 per-
cent was estimated to be equipment cost and 80 percent line installation cost. _32/ Investment in
rural automatic telephone facilities was computed by multiplying the growth of rural automatic
telephone exchange capacity, from Table 4, by the average investment cost of 630 rubles per number.
The investment cost in one number served by an automatic telephone exchange was estimated to be
3.5 times that in one number served by a manual exchange. !EY
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1959-65
(Continued)
f. Computed by multiplying the growth of length of interurban telephone channels, from Table 5
(p. 49, below), by the average investment cost of 196 rubles per channel kilometer. 121/
g. Computed by multiplying the growth of telegraph apparatus in use, from Table 6 (p. 50, below),
by the average investment cost of 13,000 rubles per apparatus.)12/ This average investment cost
includes both equipment and installation costs, of which 60 percent was estimated to be equipment
cost and 40 percent installation cost.
h. Computed by multiplying the growth of subscribers, from Table 7 (p. 51, below), and the growth
of subscriber telegraph exchanges, from Table 8 (p. 52, below), by the average investment cost of
4,000 rubles and 2,500 rubles, respectively.
i. Computed by multiplying the growth of cities with facsimile service, from Table 9 (p. 53,
below), by the average investment cost of 75,000 rubles per apparatus per city. It was assumed
that there were two facsimile apparatuses in each city.
j. The snm of investment in trunk and secondary, intrarayon, multiconductor, and coaxial cable
lines. Investment in these facilities was computed by multiplying their growth, from Table 10
(p. 54, below), by the average investment cost of 14,000 rubles, 1,330 rubles, 50,000 rubles, and
75,000 rubles, respectively. These average investment cost figures include both equipment and
installation costs.
k. Computed by multiplying the growth of microwave radio relay lines, from Table 11 (p. 55,
below), by the average investment cost of 57,400 rubles per kilometer. This figure for the aver-
age investment cost includes both equipment and installation costs. )12/
1. The sum of investment in long-range, intraoblast, intrarayon, urozhay, tropospheric scatter,
and ionospheric scatter point-to-point radio facilities. Investment in these facilities, except
tropospheric and ionospheric scatter, was computed by multiplying their growth, from Table 12
(p. 56, below), by the average investment cost of 190,000 rubles, 25,000 rubles, 7,300 rubles,
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1959-65
(Continued)
and 4,200 rubles, respectively. These figures for average investment cost include both equipment
and installation costs. !_+?.,/ Investment in tropospheric and ionospheric scatter facilities was
estimated on the basis of the amount necessary to install the tropospheric scatter link between
Frunze and Przheval'sk and the ionospheric scatter link between Leningrad and Murmansk, from
Table 1 (p. 14, above).
m. Computed by multiplying the number of amplitude-modulated (AM) radiobroadcasting transmitters
placed in operation, from Table 13 (p. 57, below), by the average investment cost of 1,250,000
rubles per transmitter. This figure for average investment cost includes both equipment and in-
stallation costs, of which 40 percent was estimated to be equipment cost and 60 percent installa-
tion cost. IV The total investment in radiobroadcasting does not include investment in frequency-
modulated (FM) radiobroadcasting facilities, because in the USSR most of these facilities are
housed in the buildings of television centers. Because of obscurities in the data reported, it was
not feasible to allocate a portion of the total investment in major television centers to FM radio-
broadcasting.
n. The sum of investment in urban wire-diffusion centers and urban wired loudspeakers. Invest-
ment in urban wire-diffusion centers was computed by multiplying the number of urban wire-
diffusion centers installed, from Table 14 (p. 58, below), by the average investment cost of
18,000 rubles per center. ?iLi/ Investment in urban wired loudspeakers was computed by multiplying
the number of urban wired loudspeakers installed, from Table 15 (p. 59, below), by the averaee in-
vestment cost of 75 rubles per loudspeaker. Ii2/ These figures for the average investment cost
include both equipment and installation costs.
o. The sum of investment in rural wire-diffusion centers and rural wired loudspeakers. Invest-
ment in rural wire-diffusion centers was computed by multiplying the number of rural wire-
diffusion centers installed, from Table 14 (p. 58, below), by the average investment cost of
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1959-65
(Continued)
10,000 rubles. 2211/ Investment in rural wired loudspeakers was computed by multiplying the number
of rural wired loudspeakers installed, from Table 15 (p. 59, below), by the average investment cost
of 75 rubles per loudspeaker. 22/ These figures for the average investment cost include both
equipment and installation costs.
p. The sum of investment in television centers and television relay stations. Investment in
television centers was computed by multiplying the number of television centers placed in opera-
tion, from Table 16 (p. 60, below), by the average investment cost of 19 million rubles. 22/
Investment in television relay stations was computed by multiplying the number of television re-
lay stations placed in operation, from Table 16, by the average investment cost of 5.5 million
rubles. These figures for the average investment cost include both equipment and installation
costs. Because of obscurities in the data reported, investment in television centers includes in-
vestment in FM radiobroadcasting facilities.
q. Including state and local investment as well as investment in housing for postal workers.
which indicated that during 1959-65 the Ministry of
Communications would invest 464 million rubles in housing construction. It was assumed that local
sources would invest an equivalent sum. The combined figure (928 million rubles) was then extrapo-
lated, using graphic analysis. Data for housing investment in 1951-58, from Table 1 (p. 14,
above), served as the basis for this extrapolation.
r. Rounded to the nearest million rubles.
s. Total investment in the Ministry of Communications during 1959-65 was estimated to be about
14.0 billion rubles. which indicated that
investment in the Ministry of Communications during 1959-b5 would be more than double that of the
preceding 7 years. The total investment during 1952-58 was about 6.9 billion rubles.
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Table 2
Estimated Total Investment in Public Post and Telecommunications Facilities
in the USSR
1959-65
(Continued)
t. Extrapolated, using graphic analysis. Investment data for 1951-58, from Table 1 cp. 14,
above), served as the basis for the extrapolation.
u. Computed by subtracting investment by the Ministry of Communications from the total invest-
ment in public post and telecommunications facilities. The remainder was assumed to be local
investment.
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Throughout the period, anticipated growth in investment by the Min-
istry will parallel anticipated growth in the total investment in
public post and telecommunications.
The percentage relationship of investment of the Ministry of
Communications and local investment to the total investment in public
post and telecommunications for the years 1959-65 is shown in Figure
4.* During 1959-65 the proportion of Ministry investment to the total
investment will be somewhat higher than that during 1951-58, averaging
about 84 percent compared with the previous 77 percent. The propor-
tion, however, will vary for individual years, ranging from about 81
percent in 1959 to about 86 percent in 1965. Although the aver-all
contribution of local investment to the total investment during
1959-65 will decrease in percentage terms compared with 1951-58, it
will incredse in absolute terms. Local investment will contribute
significantly to the development of television, wire-diffusion, and
housing facilities during the period.
It is estimated that during 1959-65 investment in telecommu-
nications will comprise 85 percent of the total investment in public
post and telecommunications and that investment in postal services
will comprise the remaining 15 percent. This composition of the
total investment is the same as that for 1951-58. With the excep-
tion of investment in common telecommunications facilities, the
percentage distribution of the total investment in telecommunications
will show marked changes throughout the period. The most significant
of these changes, shown in Figure 31** will be in investment in tele-
phone and investment in broadcasting. In 1959, investment in tele-
phone probably was only about 11 percent of the total investment in
telecommunications whereas in 1965 it will have increased to about
29 percent. This growth reflects the increased emphasis that is ex-
pected to be placed on expanding and developing the urban and inter-
urban telephone networks of the country. Investment in broadcasting
for the period 1959-65 will decrease progressively, both in abso-
lute terms and as a percent of the total investment in telecommuni-
cations: whereas such investment accounted for about 38 percent of
such investment in 1959, it will account for only about 21 percent
in 1965. This decline will result primarily from the decreased in-
vestment in wire-diffusion facilities. These facilities were rela-
tively well developed at the start of the plan period, and lessened
growth in this field is expected in the future.
The investment data cited above are based primarily on inter-
pretations of information contained in the Seven Year Plan for expand-
ing and developing the post and telecommunications sector of the
* Following p. 34.
** Following p. 22, above.
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Soviet economy. The plan emphasizes the concerted effort to be made
to meet current and future needs for service associated with the an-
ticipated economic growth of the country. The major objectives of
the plan are as follows:
1. Increasing the length of microwave radio relay lines
740 percent.
2. Increasing the length of multiconductor and coaxial
cable lines 100 percent.
3. Increasing the length of interurban telephone chan-
nels 190 percent.
4. Increasing urban telephone exchange capacity 50 per-
cent.
5. Replacing existing manual telephone exchanges in
large cities with automatic telephone exchanges.
6. Increasing rural telephone exchange capacity 75 per-
cent.
7. Expanding the television 'broadcasting transmission
base 167 percent.
8. Expanding the radiobroadcasting transmission base 60
percent.
9. Increasing the installed capacity of the subscriber
telegraph network 2,000 percent.
10. Expanding the phototelegraph network to provide serv-
ice among republic, oblast? and large industrial cen-
ters.
11. Introducing tropospheric and ionospheric scatter facili-
ties in areas where it is not feasible to construct
wirelines or microwave radio relay lines.
12. Expanding postal volume through the increased use of
mechanization techniques and through the construc-
tion of additional postal facilities.
Implementation of most of the stated objectives of the Seven
Year Plan will require large outlays of capital funds throughout the
plan period. This fact is partly reflected in Figure 51* which
* Following p. 34.
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Million 1 July
1955 Rubles
3,000 ?
2,5000
2,000
1,500
1,000
500
USSR
PERCENTAGE DISTRIBUTION OF TOTAL
PUBLIC POST AND TELECOMMUNICATIONS INVESTMENT, 1959-65
11
2,097
81%
194
Total Public Post and Telecommunications Investment
Ministry of Communications Investment
Local Investment
2,1 6 7
17'1.
83%
2,2 1 4
16%
84%
2,296
15%
85%
2,361
15%
85%
2,5 4 8
I 14%
86%
2,902
14%
86%
1959 1960 1961 1962 1963 1964 1965
28307 2-60
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USSR Figure 5 50X1
AVERAGE ANNUAL INVESTMENT IN PUBLIC POST AND TELECOMMUNICATIONS
FOR 1951-58 AND 1959-65
Million I July 1955 Rubles
Urban Telephone Facilities Rural Telephone Facilities Interurban Telephone Facilities
1
1951-58 j70
1959-65 1136
Microwave Radio Relay Lines
1951-58 137
1959-65 180
Broadcasting Facilities
1951-58 I , 360
1959-65 J584
1
1951-58 7
1959-65 Ho
1951-58 61
1959-65 207
Trunk, Secondary, and Intrarayon
Multiconductor Cable Lines Wirelines
1951-58 7 90 H 1951-58 220
_
1959-65 1259 1959-65 I 376
Telegraph Facilities
I
1951-58 124
1
1959-65 160
Estimated Total Average Annual Investment
1951-58
1959-65
28308 2-60
1,200
Postal Facilities
1951-58I 1184
1959-65-1355
, 2,400
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indicates that the average annual investment during 1959-65 will be
twice that during 1951-58. This increase in the average annual in-
vestment coupled with the fact that no appreciable change is ex-
pected to occur in the growth of the post and telecommunications labor
force indicates that investment during 1959-65 will also be more
capital-intensive than that during 1951-58.
Although the plan for the development of post and telecom-
munications resources during 1959-65 is ambitious, it is realistic.
The plan addresses itself to eliminating one of the major deficien-
cies of the telecommunications system -- the lack of modern, high-
capacity telecommunications facilities. If the plan is to be wholly
fulfilled, however, substantial increases in the availability of
modern telecommunications equipment will be necessary. In the past,
communications ministries and enterprises have experienced difficul-
ties in acquiring necessary equipment and materials. For example,
it was reported that in 1958 the nonavailability of equipment was
the main problem confronting Uzbek SSR in attempts to develop its
post and telecommunications resources. If equipment becomes avail-
able to the Ministry of Communications in sufficient amounts, ful-
fillment of the Seven Year Plan is highly probable. Successful com-
pletion will result in a post and telecommunications system capable
of making a fuller contribution to the growing economic and mili-
tary activities of the country. 2.51
C. Ministry of Communications Investment Related to Total State
Centralized Investment, 1951-65
State centralized investment in post and telecommunications
in the USSR is believed to have been inadequate during 1951-58. The
total state centralized investment for the over-all development of
the Soviet economy during this period was about 1,167 billion rubles.
Of this amount, investment funds allocated to the Ministry of Communi-
cations were only about 7.5 billion rubles, or less than 1 percent of
the total. Although the rate of growth of Ministry investment,
shown in Pigure 6,* was greater than that of total state cen-
tralized investment during 1951-58, the relatively small amount
of investment funds allocated to the Ministry limited the develop-
ment of facilities to a rate that was too low to keep pace with the
rate of development of the economy as a whole. This limited growth
in post and telecommunications facilities was the primary factor
causing the supply of service to lag behind the demand for service.
The percentage relationship of investment of the Ministry of
Communications to total state centralized investment since 1951
is summarized in Table 3.** The data vividly point up the low level
* Following p. 36.
** Table 3 follows on p. 37.
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of centralized investment funds made available to the post and tele-
communications sector compared with the economy as a whole. In 1958,
for example, whereas the share of total state centralized invest-
ment allocated to post and telecommunications was only about 0.7 per-
cent, available information indicates that the share allocated to trans-
portation was about 10 percent. Allocations of the total state centra-
lized investment to the industrial and agricultural sectors in that
same year were about 64 percent and 15 percent, respectively. ,2?/
It is estimated that during the Seven Year Plan period in-
vestment of the Ministry of Communications will be about 14 billion
rubles, whereas the total state centralized investment will be about
1,971 billion rubles. State centralized funds allocated to the Min-
istry during each year during 1959-65, as shown in Table 3, will
remain less than 1 percent of the total.
The average annual rate of growth of Ministry investment during
1959-65, shown in Figure 6,* will be as rapid as that of total state
centralized investment, 8.6 percent compared with 8.5 percent. The com-
parability of both rates of growth suggests that the existing gap be-
tween the available supply of service and the demand for service will
not be narrowed. For the most part, however, the rate of growth of Min-
istry investment is heavily influenced by the decreasing rate of invest-
ment in broadcasting facilities that will develop during the period.
The rate of growth of investment in mainline high-capacity facilities
such as multiconductor cable and microwave radio relay lines (which
are in short supply) will be substantially higher than the rate of
growth for the economy as a whole, amounting to about 17.5 percent
and about 23.0 percent, respectively. Under the circumstances the
level of investment in these facilities will go a long way toward nar-
rowing the gap between supply and demand for service.
D. Marginal Capital-Output Ratio, 1951-65
The marginal capital-output ratio** in the public post and tele-
communications sector of the economy of the USSR is expected to be about
1.53 to 1 during 1951-65. This ratio indicates that additions to capi-
tal stock during the period will be highly productive. The use of this
* Following p. 36.
** Hereafter referred to as the capital-output ratio. The term is de-
fined as the ratio between investment and the resulting increase in out-
put, measured in terms of revenue. The capital-output ratios discussed
in this report were computed by dividing the total investment in public
post and telecommunications facilities, from Table 1 (p. 1)4-, above) and
from Table 2 (p. 24, above), by increases in revenue from public post
and telecommunications services, from Table 17 (p. 61, below).
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USSR
RATES OF GROWTH OF TOTAL STATE CENTRALIZED INVESTMENT
AND MINISTRY OF COMMUNICATIONS INVESTMENT, 1951-65
Figure 6 50X1
Million 1 July
1955 Rubles
4,000
3,000
2,000
1,000
900
800
700
600
500
Billion 1 July
1955 Rubles
., ..1.-i,-?,....1
50%
i
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t
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? :- ? 4.` ; ", ? 4 4 ', : 4.
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_...,....?...:.
1951-58 1959-65 , t
.:._ ,
.
....-. -. Total State Centralized Investment
t . 4 ;
t
411.ft: +.........---;- Total Ministry of Communications Investment Ti...1
1- l'
'
?
q1-1- . . , ---f-t-
,..;
tH ?
.
,ii.......i.i.... ,;...1.
: .
' I t ?
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.....
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' . t.'t
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' 4
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' 1-T -
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4 -4'4
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t
--t-1-4
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. ?
, 1. 4 T
. .
--'-' '------
400
300
200
100
90
80
70
60
50
400 40
1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965
* The slope of the lines of the graph, when related to this scale, gives on
approximation of the percentage change from one year to the next.
28309 2-60
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Table 3
Investment by the Ministry of Communications as a Percent of State Centralized Investment
in the USSR 2/
1951-65
Year
Investment by the Ministry
of Communications 12/
(Billion 1 July 1955 Rubles)
State Centralized
Investment 2/
(Billion 1 July 1955 Rubles
NEW Unit Evaluation 2/)
Investment by the Ministry
of Communications as a
Percent of State Centralized
Investment
1951
0.606
101
0.60
1952
0.675
113
0.60
1953
0.760
118
0.64
1954
0.900
137
0.66
1955
1.10
1)47
0.75
1956
1.00
166
0.60
1957
1.10
185
0.60
1958
1.40
200
0.70
1959
1.70
219
0.78
1960
1.80
237
0.76
1961
1.85
257
0.72
1962
1.95
278
0.70
1963
2.00
301
0.66
1964
2.20
326
0.68
1965
2.50
353
0.71
a. All data are rounded to three significant digits except percentages: which are rounded to
two significant digits.
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Table 3
Investment by the Ministry of Communications as a Percent of State Centralized Investment
in the USSR
1951-65
(Continued)
b. Data for 1951-58 are from Table 1 (p. 14, above), and data for 1959-65 are from
Table 2 (p. 2)4-, above).
d. Prices of 1 July 1955 adjusted for new regional prices and wage norms introduced
in 1956. This adjustment increased capital investment costs for the whole economy
slightly more than 4 percent. In contrast to column 2, data in column 1 were not of
sufficient magnitude to justify application of the 4-percent correction that had been
included in Soviet statistics.
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ratio as an absolute measure of the productivity of capital for the
post and telecommunications sector as a whole, however, is limited
by several important factors, as follows:
1. The prices charged for public post and telecommuni-
cations services may be unusually high in relation to the investment
costs of these services. In 1958, for example, the Ministry of Com-
munications was to charge the Kiev Electric Powerplant 3.5 million
rubles per year for the leasing of five telecommunications channels.
The total cost for the construction of these facilities was only 1.2
million rubles, and the annual operating cost was only 45,000 rubles.
If this example is typical of the pricing policies of the Ministry
of Communications, then the highly favorable capital-output ratio for
public post and telecommunications is not an accurate reflection of
the physical productivity of capital but rather is a reflection of
an inordinately high price charged for telecommunications service. 2/
2. The use of annual investment data rather than total
capital assets for the computation of the over-all capital-output
ratio may have affected the ratio significantly. A large base of
relatively unproductive capital assets would obviously outweigh the
influence of a more favorable ratio resulting from the recent addi-
tions of highly productive capital assets.
3. The computation of the capital-output ratio for the
entire public post and telecommunications sector combines various
investment-revenue relationships that are sufficiently dissimilar
to make the average less meaningful.
A comparison of the capital-output ratios both for the public
post and telecommunications sector as a whole and for its subsectors
for the periods 1951-58 and 1959-65 is shown below.*
This comparison clearly shows that the postal, the broad-
casting, and the telephone and telegraph subsectors actually are
three distinct entities, the capital-output ratios of which bear
little similarity either to one another or to the over-all capital-
output ratio for the public post and telecommunications sector.
In the postal system the capital-output ratio reflects an
extremely high return on new investment during both periods. This
high return, however, probably is attributable more to increases in
* The data covered by the various capital-output ratios were ad-
justed to reflect a lag as observed from the data in Figure 7 (fol-
lowing p. 40) and to eliminate the effect of price changes for broad-
casting services in 1952-53. Consevently, the capital-output ratios
are only representative of the stated time periods.
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CAPITAL-OUTPUT RATIO
1.56 to 1 151 to I
1951-58
1959-65
0.75 to I 032 to
1.72 to 1
1.22 to 1
2.65 to 1
1.90 to 1
Public Pest and
Telecommunications
Sector
Postal System
Broadcasting
System
Telephone and
Telegraph System
the postal labor force than to increases in investment. This assump-
tion is based on the belief that an expansion in postal volume, which
in turn effects an expansion in postal revenue, generFilly is accom-
plished through relatively light inputs of capital coupled with heavy
inputs of labor.
In the broadcasting system the capital-output ratio also re-
flects a high productivity of new investment. Mach of the exceptional
nature of this ratio, however, lies in the fact that, with the excep-
tion of investment in wire-diffusion service, broadcasting investment
includes only the cost of transmitting facilities. Investment in
wire-diffusion service includes the cost of both transmitting and
receiving facilities. Thus the broadcasting system obtains revenue
from all receiving facilities but only invests in receiving facili-
ties in the wire-diffusion service.
Another factor contributing to the favorable capital-output
ratio in the broadcasting system is that in providing radiobroadcast-
ing or television service to an area, usually only one transmitter*
* In television broadcasting a single broadcasting unit includes
one transmitter for broadcasting the video portion of the signal
and another transmitter for broadcasting the audio portion of the
signal.
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USSR
PUBLIC POST AND TELECOMMUNICATIONS INVESTMENT AND INCREASES
IN PUBLIC POST AND TELECOMMUNICATIONS REVENUE, 1951-65
Figure 7 50X1
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. ?
1.0.1;ALRUBLIC.T.OSTL,L.,
_ A1413 "r,,EtE,c,c5',40chilUt41C' d!ij_1:):1,4.5,,i KTO,F_Z_?_,
-
" - ?
, - ?
TELEPHONE AND -TiCEdRAPH?SYSTEM?
PERCENT OF CHANGE.'
?25x
Annual Investment
Annual Increase in Revenue
1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965
* The slope of the lines of the graph, when related to this scale, gives on
approximation of the percentage change from one year to the next.
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is necessary regardless of the number of radiobroadcast or television
receivers in the area. In an expanding economy, therefore, the re-
turns on investment in radiobroadcasting and television transmitting
facilities continually increase throughout the life of these facili-
ties. The more favorable capital-output ratio of the broadcasting
system during 1959-65 compared with 1951-58 is attributed to this
fact as well as to the fact that during 1959-65 investment in wire-
diffusion service will decrease in relation to investment in other
broadcasting services.
The capital-output ratio is less favorable for the telephone
and telegraph system than it is for the postal and broadcasting
systems -- 1.90 to 1 compared with 0.75 to 1 and 1.72 to 1, respec-
tively, for 1951-58 and 2.65 to 1 compared with 0.72 to 1 and 1.22
to 1, respectively, for 1959-65. The capital-output ratio for the
telephone and telegraph system, however, particularly during 1959-65,
is comparable to the capital-output ratio for similar investment in
the US during 1950-56, which was about 2.76 to 1 for telephone
carriers.*
The less favorable capital-output ratio for the telephone
and telegraph system during 1959-65 compared with 1951-58 is at-
tributed to a shift in the pattern of investments. During most of
the 1951-58 period, telephone and telegraph output was expanded by
applying relatively inexpensive equipment to existing facilities.
Telephone carrier equipment was installed on existing wirelines,
and teletype apparatus replaced manual Morse equipment. By 1956
these methods for expanding output were rapidly being exhausted.
Both the discarded Sixth Five Year Plan and the new Seven Year Plan
emphasized the expansion of output through the construction of new,
high-capacity facilities such as microwave radio relay and multi-
conductor cable lines. Most of the investment for the construction
of these facilities, which are heavy users of capital, will occur
during 1959-65, but full service utilization will not occur until
later. As a consequence, investment per unit of output will be
greater during 1959-65 than in 1951-58.
A comparison of the annual investment in public post and
telecommunications and the annual increases in the revenue from
public post and telecommunications, shown in Figure 7,** illus-
trates some significant relationships. There is a lag of about 1
year between changes in investment and corresponding changes in
reventie. This lag is most readily seen during 1955-65.
* Computed from investment
phone carriers
** Following p. 40, above.
and revenue data for Class A tele-
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In the postal system, no consistent relationship exists between
changes in postal investment and changes in postal revenue. This situ-
ation probably is attributable to the fact that investment in the pos-
tal system is reflected primarily in increased efficiency and lower op-
erating costs and only secondarily in increased revenue. Increases in
postal revenue are associated more with increases in the postal labor
force than with increases in investment.
In the broadcasting system a relatively consistent relationship
exists between changes in broadcasting investment and changes in broad-
casting revenue, assuming a lag of about 1 or 2 years. The changes in
revenue compared with the changes in investment vary. These fluctua-
tions, however, are inherent in the nature of broadcasting investment.
For example, sizable increases in radiobroadcasting and television rev-
enue occur when these services are introduced into areas not already
served. The expansion of these services in areas already served, how-
ever, will not produce comparable increases in revenue.
A relatively consistent relationship also exists between changes
in telephone and telegraph investment and changes in telephone and tele-
graph revenue, assuming a lag of about 3 years. A lag of several years
is not unusual for returns on investment in these facilities, because
the capacities of newly installed telephone and telegraph facilities are
seldom fully utilized during the early years of their operation.
The increased cost associated with the construction and instal-
lation of modern, high-capacity telecommunications facilities during
1959-65 will be partly offset by economies resulting from reductions
in operating costs per unit of output. Reduced operating costs will
result from decreased labor costs per unit of output and increased
capacity for handling traffic per unit of time. ..2/
IV. Influence of Intra-Bloc Agreements on Investment
The level and pattern of investment in post and telecommunications
in the USSR is influenced not only by domestic requirements for service
but also by international requirements. Most important of these inter-
national requirements is the desire of the USSR to establish a unified
post and telecommunications system within the Sino-Soviet Bloc that
would allow the USSR to exercise increased economic and political con-
trol over the other Bloc countries and contribute to the over-all mili-
tary potential of the Bloc.
The first known step taken by the USSR for the establishment of a
Bloc-wide, integrated telecommunications system occurred in 1950, when
the USSR directed Rumania to construct a special telecommunications
network for use in the event of general mobilization or emergency.
This network was to be part of a special telecommunications network
encompassing all countries of the Soviet Bloc, excluding Albania. On
completion the Rumanian network was to connect with the telecommunica-
tions networks of the USSR, Bulgaria, and Hungary. Completion of the
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network was originally scheduled for 1955, but the economic crisis
in Rumania in 1953-54 delayed completion until 1960. Li/
In 1956 the USSR initiated another, more intensive move to over-
come the lack of a unified post and telecommunications system within
the Bloc. Beginning in that year, a series of at least 11 Soviet
Bloc conferences related to this subject were held at the behest of
the USSR. In consequence of these meetings, a new group known as
the Organization for Cooperation Among Socialist Countries in the
Fields of Post and Communications (OSS) was formed in late 1957.
There are some indications that this new body is associated with, but
not a part of, the Council for Mutual Economic Assistance (CEMA).
The OSS organization is mainly concerned with integrating and
expanding the post and telecommunications systems and services of
its member countries. The major objectives of the organization in-
clude making all Bloc telecommunications systems partly automatic by
1965 and fully so by 1975, accelerating telegraph traffic between
member countries, and establishing microwave radio relay stations
for use in an East Bloc television network to be completed by 1965.
It is believed that each country will provide the funds to finance
its share of the OSS program, with possibly some financial help
from the USSR for the more underdeveloped Bloc countries. The
importance attached to the OSS program is indicated by the report
that the Hungarian economic plan of 1958 was altered to provide
funds for implementation of the OSS obligations of Hungary. LE/
Because of the recent formation of OSS, it is believed that
directives of the organization had only a limited effect on Soviet
investment in post and telecommunications in 1958. The full effect
of OSS, however, undoubtedly will be felt during the Seven Year Plan.
It is not known what amount of investment resources allocated to
public post and telecommunications during the Seven Year Plan will
be used for implementation of the OSS program. The following plans
for specific facilities, however, are believed to have been devel-
oped in response to OSS objectives LP
1. Installation of a cable from Moscow to Hanoi via Com-
munist China and Outer Mongolia, planned for completion by 1962.
2. Establishment of a facility from Moscow to East Berlin
via Kaliningrad, Warsaw, Lodz, and Frankfurt an der Oder, using exist-
ing underground cables between Warsaw and East Berlin and a microwave
radio relay line to be constructed between Moscow and Warsaw, planned
for completion by late 1960.
3. Construction of a microwave radio relay line from Moscow to
East Berlin via Brno, Prague, and Dresden, for completion in 1962.
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4. Installation of an underground, 4-tube coaxial cable line
from Moscow to East Berlin via Kiev, Livov, and Katowice, for completion
by mid-1964. Two tubes will carry television signals and the other two
will carry multiple-channel carrier systems. Eventually, this line will
be extended to Peking.
When these facilities are completed, all of the capitals of
the Sino-Soviet Bloc will be interconnected either by cable (multi-
conductor or coaxial) or by microwave radio relay lines. These facil-
ities will provide a substantial increase over present capacities and
will be a major step toward fulfillment of the long-run plans of OSS
for the complete integration of all telecommunications systems of the
Sino-Soviet Bloc.
V. Future Trends
The accelerated growth of key sectors of the Soviet economy that is
planned for the period 1959-65 will result in increased demands for post
and telecommunications service. Plans for the development of post and
telecommunications during this period recognize this fact and indicate
that an intensive effort will be made to construct and install high-
capacity, basic telecommunications facilities in sufficient quantities
to meet these demands. Implementation of plans for expansion of post
and telecommunications will require that the Ministry of Communications
be given more investment funds and equipment than in the past. If these
increases are forthcoming, the Ministry may pursue the following
courses of action:
1. Install about 20,000 km of microwave radio relay lines for
transmission of interurban telephone and telegraph traffic and for
transmission of network television.
2. Install about 30,000 km of multiconductor cable lines (in-
cluding coaxial cable) for increasing interurban telephone and tele-
graph circuit capacity. Expansion of multiconductor cable facilities,
however, will be contingent on the availability of equipment from
either domestic production or importation from various Free World
and Soviet Bloc countries. Indications are that domestic output is
not currently meeting internal needs for such equipment. In early
1959 the USSR sought to import a large quantity of multiconductor
cable from various NATO countries. This action was taken in spite
of the fact that the type of multiconductor communications cable
that was sought is under embargo.
3. Increase urban telephone exchange capacity by about
1 million lines, of which more than 90 percent will be automatic.
4. Increase rural telephone exchange capacity by about
380,000 lines, of which more than 25 percent will be automatic.
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5. Expand the subscriber telegraph network by about 58,000 sub-
scribers. The expansion of subscriber telegraph facilities is needed
primarily to meet increased telegraphic service requirements resulting
from the industrial reorganization.
6. Expand the facsimile network to provide service to at least
60 additional cities compared with 1957. By the end of 1965, facsimile
service will be available at 125 major cities and industrial centers.
7. Expand the television broadcasting transmission base by
construction of about 100 major television stations and about 230
television relay stations.
8. Expand the radiobroadcasting transmission base through the
construction of AM, FM, and wire-diffusion radiobroadcasting facilities.
9. Expand the use of tropospheric and ionospheric scatter facil-
ities. It is expected that this communications technique will be used
extensively in the northern regions of the country and in other remote
areas where it is not economically or technically feasible to construct
wirelines or microwave radio relay lines.
10. Take all actions necessary for implementation of OSS direc-
tives.
11. Expand postal services through the construction of 18 main
post offices, 27 railroad post offices, 30 mail transport offices, and
several thousand branch communications offices. In addition, equipment
will be introduced to speed the handling and delivery of mail. These
actions probably will include installing semiautomatic letter-sorting
machines in large post offices, doubling the number of motor vehicles
carrying mail, and adding about 1,000 railroad mail cars.
The planned allocation of investment funds to the Ministry of Com-
munications during 1959-65 appears to be sufficient for the implementa-
tion of post and telecommunications expansion plans. Increases in the
supply of equipment and materials made available to the Ministry of
Communications will be the prime factor on which successful completion
of these plans will hinge. If these supplies become available in suf-
ficient amounts, the completion of plans is highly probable. With such
an increased physical plant, the post and telecommunications system
will be able to meet new requirements for service generated both by the
industrial reorganization and by the anticipated economic growth of
the USSR. By so doing, the system will make a fuller contribution to
the economic development of the country.
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APPENDIX A
STATISTICAL TABLES
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Table 4
Estimated Capacity of Telephone Exchanges Operated by the Ministry of Communications
of the USSR 2/
1950-65
Thousand Lines
Year
Urban
Rural
Manual
Automatic
Total
Manual
Automatic
Total
1950
778.0
563.0
1,341.0
233.2
0.3
233.5
1951
811.0
617.0
1,428.0
253.3
1.8
255.1
1952
844.0
689.0
1,533.0
273.2
3.6
276.8
1953
854.0
735.0
1,589.0
296.2
6.7
302.9
1954
893.0
823.0
1,716.0
331.7
9.6
341.3
1955
927.0
890.0
1,817.0
354.9
12.2
367.1
1956
944.0
960.0
1,904.0
395.2
16.1
411.3
1957
961.0
1,030.0
1,991.0
435.5
20.0
455.5
1958
978.012/
1,100.0 Li
2,078.0
475.812/
23.912/
499.7
1959
991.0 2/
1,179.0 2/
2,170.0
515.8 2/
32.0 2/
547.8 2/
1960
1,000.0 2/
1,280.0 2/
2,280.0
555.8 2/
42.0 2/
597.8 1/
1961
1,006.0 2/
1,394.0 2/
2,400.0
595.8 2/
53.0 2/
648.8 2/
1962
1,011.0 2/
1,534.0 2/
2,545.0
635.8 2/
67.0 2/
702.8 2/
1963
1,014.0 sj
1,686.0 2/
2,700.0
675.8 2/
83.0 2/
758.8 2/
1964
1,016.0 2/
1,874.0 2/
2,890.0
715.8 2/
100.0 2/
815.8 2/
1965
1,017.0 2/
2,100.0 11/
3,117.0
755.8 2/
123.9 11/
879.7 L/
u. Assuming tne same absolute growth for 1957-58 as for 1956-57.
c. Computed by subtracting urban automatic exchange capacity from the total urban manual and
automatic exchange capacity.
d. Interpolated, using graphic analysis.
e. Extrapolated by applying the absolute growth of 40,000 telephone numbers per year.
f. which indicates that the capacity of automatic tele-
pho_ e sy . mi ion lines during 1959-65. It was assumed that 1 mil-
lion of these lines would be for urban use and the rest for rural use.
g.
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Table 5
Estimated Length of Interurban Telephone Channels
Operated by the Ministry of Communications
of the USSR
1950-65
Million Channel-Kilometers
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
Length of Interurban Telephone Channels
1.4 2/
1.612/
1.912/
2.312/
2.712/
3.0 2/
3.3 12/
3.6 2/
3.9 2/
4.4 LI
5.0 12/
5.712/
6.5 12/
7.4 12/
8.812/
11.3 f/
a.
b.
C.
d.
e.
f.
Interpolated,
Assuming the
using graphic analysis.
same absolute growth for 1957-58 as for 1956-57.
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Table 6
Estimated Number of Telegraph Apparatus
in Use by the Ministry of Communications
of the USSR 2/
1950-65
Units
Year Telegraph Apparatus
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
26,000
28,000
29,000
30,000
32,000
33,000
35,000
37,000
39,000 12/
41,000 12/
43,000 12/
45,000 12/
47,000 12/
49,000 12/
51,000 12/
53,000 12/
b. Extrapolated by applying the average absolute
rate of growth shown during 1955-57.
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Table 7
Estimated Number of Subscribers
to the Subscriber Telegraph Network
in the USSR
1950-65
Units
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
Subscribers
175 2/
350 2/
525 2/
702 12/
820 12/
1,000 12/
1,400 2/
2,200 2/
3,000 1/
6,000 2/
11,200 2/
18,600 2/
27,400 2/
37,300 2/
48,300 2/
60,000
a. Extrapolated, using graphic analysis.
b. 22/
c.
d. Assuming the same absolute growth for 1957-58
as for 1956-57.
e. Interpolated, using graphic analysis.
f. 212/
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Table 8
Estimated Number of Subscriber Telegraph Exchanges
in the USSR
1950-65
Units
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
Exchanges
'SW
30W
5W
61 12/
74 12/
84 12/
105 2/
126 2/
147 2/
182 s/
228 2/
286 2/
353 Si
428 2/
511 2/
600 11/
a. Extrapolated, using graphic analysis.
b.
f
c. Interpolated, using graphic analysis.
e. Assuming the same absolute growth for 1957-58 as for
1956-57.
f. Estimated on the basis of 100 subscribers per sub-
scriber telegraph exchange.
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Table 9
Estimated Number of Cities
Having Facsimile Service
in the USSR 2/
1950-65
Units
Year
Cities
1950
20
1951
20
1952
24
1953
27
1954
28
1955
29
1956
46 h/
1957
64J
1958
82/
1959
90W
1960
98W
1961
106 11/
1962
113 h/
1963
118W
1964
122 12/
1965
125 2/
b. Interpolated, using graphic
c.
d. Assuming the same absolute growth for 1957-58
as for 1956-57.
analysis.
e.
racsimile service will be macle
available to republic centers, oblast centers,
and large industrial cities.
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Table 10
Estimated Length of Wire and Cable Lines Operated by the Ministry of Communications
of the USSR 2/
1950-65
Thousand Kilometers
Year
Length of Wire Lines
Length of Cable Lines
Trunk and
Secondary- Lines
Intrarayon
Lines
Multiconductor
Cable Lines
Coaxial
Cable Lines
1950
1,940
532
11.3
0
1951
1,950
592
13.8
0
1952
1,960
652
16.2
o
1953
1,970
712
18.7
0
1954
1,980
772
21.8
o
1955
1,990
832
24.9
o
1956
2,000
892
28.6
0.6
1957
2;010
952
32.4
0.6
1958
2,02012/
1,012 h/
36.2 12/
1.2 h/
1959
2,034 1/
11070 2/
40.4 2/
1.5 f/
1960
2,050 1/
1,150 1/
44.7 2/
1.9 1/
1961
2,068 1/
1,240 1/
49.3 2/
2.2 2/
1962
2,088 1/
1,330 1/
54.2 2/
2.4 1/
1963
2,109 1/
1,420 1/
59.6 2/
2.6 2/
1964
2,130 sli
1,510 2/
65.6 2j
2.9 1/
1965
2/152 11
1,600 2/
72.4 g/
3.1 1/
D. Assuming tne same absolute growth for 1957-58 as for 1956-57.
c. Including only 180 kilometers of the Moscow-Vladimir and 375 kilometers of the Moscow-
Kiev coaxial cable lines. 8jj
d. Extrapolated, using graphic analysis.
e. Interpolated, using graphic analysis.
f. Including 750 kilometers of the Moscow-Kiev coaxial cable line. LIg/
ge
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Table 11
Estimated Length of Microwave Radio Relay Lines
Operated by the Ministry of Communications
of the USSR
1955-65
Kilometers
Ye ax
Length of Microwave
Radio Relay Lines
1955
500 2/
1956
1,500 2/
1957
3,500 2/
1958
5,500 12/
1959
7,750 2/
1960
10,250 s/
1961
13,250 s/
1962
16,350 s/
1963
19,750 s/
1964
23,500 s/
1965
27,500 2/
a. 84
c. Interpolated, using graphic analysis.
d.
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Table 12
Estimated Number of Point-to-Point Radio Transmitters Under the Ministry of Communications
of the USSR 2.11/
1950-65
Units
Year
Long-Range Radio
Telephone-Telegraph
Transmitters 12/
Intraoblast Radio
Telephone-Telegraph
Transmitters a/
Intrarayon Radio
Telephone-Telegraph
Transmitters
Uro.zhay (Harvest) Radio
Telephone-Telegraph
Transmitters
1950
220
300
11,600
25,000
1951
260
400
13,600
27,900
1952
300
500
15,750
31,000
1953
340
600
18,000
35,000
1954
380
700
20,300
70,000
1955
420
800
22,600
90,000
1956
460
900
25,000
100,000
1957
500
1,000
27,700
106,000
1958
540
1,100
30,400 1/
112,000 I/
1959
570 2/
1,330 2/
33,300 1/
118,00o 2/
1960
594 2/
1,540 2/
35,700 2/
124,000 2/
1961
612 2/
1,730 2/
37,900 2/
129,000 2/
1962
625 2/
1,900 2/
39,700 2/
134,000 2/
1963
637 2/
2,040 2/
41,300 2/
138,000 2/
1964
645 2/
2,150 2/
42,400 2/
141,000 2/
1965
650 2/
2,200 si
43,000 2/
143,000 2/
b. Data for 1950-58 were estimated on the basis of Soviet requirements for long-range radio telephone-
telegraph transmitters.
c. Data for 1950-58 were estimated on the basis of Soviet requirements for intraoblast radio telephone-
telegraph transmitters. ?
d. Extrapolated, using graphic analysis.
e. Interpolated, using graphic analysis.
f?
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Table 13
Estimated Number
of Amplitude-Modulated (AM) Radiobroadcasting Transmitters
in the USSR 2/
1950-65
Units
Year
Radiobroadcasting Transmitters
1950
160
1951
161
1952
164
1953
167
1954
175
1955
185
1956
196
1957
206
1958
216 12/
1959
226 12/
1960
236 12/
1961
246 12/
1962
256 h/
1963
266 12/
1964
276 12/
1965
286 12/
b. Extrapolated by applying the absolute growth shown during 1956.57.
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Table 14
Estimated Number of Wire-Diffusion Centers
in the USSR L.a/
1950-65
Units
Year
Wire-Diffusion Centers
Urban
Rural
Total
1950
9,567
9,352
18,919
1951
9,319
12,652
21,971
1952
9,223
16,129
25,352
1953
9,410
18,704
28,114
1954
9,620
21,416
31,036
1955
9,746
23,763
33,509
1956
9,991
25,252
35,243
1957
10,464
26,513
36,977
1958
1959
11,28912/
11,717 1/
28,71112/
31,884 2/
40,00o 2/
43,601
1960
11,988 2/
34,783 2/
46,771
1961
12,140 1/
37,329 2/
49,469
1962
12,259 1/
39,503 2/
51,762
1963
12,327 1/
41,366 2/
53,693
1964
12,360 1/
42,940 2/
55,300
1965
12,386 1/
44,224 2/
56,610
b. uomputed by applying the same percentage relationship of urban and rural
growth to the total growth for 1957-58 as for 1956-57.
c. 1
d. Computed by dividing the number of urban wired loudspeakers, from Table 15
(p. 59, below), by the number of urban wired loudspeakers per urban wire-
diffusion center (1,182), as shown for 1958.
e. Computed by dividing the number of rural wired loudspeakers, from Table 15,
by the number of rural wired loudspeakers per rural wire-diffusion center.
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Table 15
Estimated Number of Wired Loudspeakers
in the USSR 2/
1950-65
Thousand Units
Year
Wired Loudspeakers
Urban
Rural
Total
1950
7,367
2,318
9,685
1951
7,824
2,816
10,640
1952
8,234
3,444
11,678
1953
9,160
4,681
13,841
1954
10,116
6,323
16,439
1955
11,007
8,537
19,544
1956
11,780
10,411
22,191
1957
12,600 12/
12,200 12/
24,800
1958
13,340 2/
13,660 2/
27,000 1/
1959
13,850 2/
15,200 2/
29,050
1960
14,170 2/
16,600 2/
30,770
1961
14,350 2/
17,830 2/
32,180
1962
14,490 2/
18,880 2/
33,370
1963
14,570 2/
19,780 2/
34,350
1964
14,610 2/
20,540 2/
35,150
1965
14,640 E/
21,160 1/
35,800
b.
c. Extrapolated, using graphic analysis.
d. 4
e. Interpolated, using graphic analysis.
f. 95/
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Table 16
Estimated Number of Television Centers and Television Relay Stations
in the USSR 21
1950-65
Units
Year
Television Centers
Television Relay Stations
1950
2
2 12/
1951
2
2W
1952
3
1953
3
1954
4
5W
1955
12
14 12/
1956
20
23W
1957
37 2/
43 12/
1958
6o/
1959
1960
75 2/
9Q 2/
104 2/
138J
1961
1962
104 2/
118!!
171!!
204 2/
1963
1964
132!!
146 2/
236!!
268!!
1965
160!!
300/
b. Computed on the basis of the ratio of television centers to television relay
stations shown for 1958.
c.
d.
e. Interpolated, using graphic analysis.
f.
g? 122/
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Table 17
Estimated Revenue of the Ministry of Communications
of the USSR, by Type of Service
1951-65
Million 1 July 1955 Rubles
Telephone
Year Postal Urban and Rural Interurban
1951 3,315
1952 3,550
1953 3,691
1954 4,059
1955 4,397
1956 14,580
1957 4,721
1958 5,025
1959 5,321
1960 5,630
1961 6,207
1962 6,767
1963 7,343
1964 7,903
1965 8,479
694
739
786
854
908
959
1,065
1,257
11490
1,728
1,964
2,199
2,434
2,669
3,022
1,224
1,304
1,349
1,428
1,531
1,621
1,478
1,546
1,613
1,682
1,750
1,818
1,887
1,954
2,022
Total Telegraph
1,918 1,160
2,043 1,257
2,135 1,354
2,282 1,396
2,439 1,410
2,580 1,431
2,543 1,866
2,803 1,949
3,103 2,031
3,410 2,113
3,714 2,195
4,017 2,278
4,321 2,360
4,623 2,442
5,044 2,524
Broadcasting,. Total Revenue 12/
1,441
1,558
1,278
1,335
1,592
1,902
2,043
2,391
2,830
3,489
4,058
4,486
4,909
5,335
5,762
7,886
8,454
8,442
9,016
9,743
10,454
11,173
12,168
13,285
14,642
16,174
17,548
18,933
20,303
21,809
a. All data are rounded to the nearest million rubles.
b. A breakdown of revenue data for all categories does not in all cases agree with the totals shown.
These variations, however, are negligible.
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APPENDIX B
GLOSSARY OF TECHNICAL TERMS
Amplitude modulation (AM): The process by which a selected carrier
frequency is varied in magnitude (amplitude) by other frequencies
that contain the information to be transmitted in telecommunications.
(See Frequency modulation.)
Apparatus: Instruments, machines, appliances, and other assemblies
used in providing a telecommunications facility.
Automatic (as an adjective): Of or pertaining to any process in-
volved in producing telecommunications service which does not re-
quire direct, immediate human assistance.
Band (of frequencies): The entire range of frequencies
numerically specified frequency limits. The magnitude
is a limiting factor on the amount of information that
between two
of this range
can be trans-
mitted in telecommunications. With respect to frequencies of the
radio spectrum as a whole, the International Telecommunication Union
has for convenience divided the whole radio spectrum into eight major
bands, as follows:
Frequency Bands
Range
30 kc** and below
30 to 300 kc
300 to 3,000 kc
3,000 to 30,000 kc
30,000 kc to
300 mcxxx
300 to 3,000 mc
3,000 to 30,000 mc
30,000 to 300,000 mc
Type
Very low frequencies (VLF)
Low frequencies (LF)
Medium frequencies (MF)
High frequencies (HF)
Very high frequencies (VHF)
Ultra high frequencies (UHF)
Super high frequencies (SHF)
Extremely high frequencies
(EHF)
Corresponding Wave*
Myriametric waves
Kilometric waves
Hectometric waves
Decametric waves
Metric waves
Decimetric waves****
Centimetric waves*xxx
Millimetric waves****
* Waves are undulating disturbances: a sound wave is a disturbance
in the air, which is an elastic medium, and an electric wave is a dis-
turbance in any medium whatever. The number of waves per second is the
frequency of a given wave. Because the speed of wave propagation is
considered to be constant, the length of a given wave is in inverse re-
lation to its frequency: the longer the wave length, the lower the fre-
quency, and the shorter the wave length, gootnotes continued on p. 3?7
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Cable: A bundle of sheathed, insulated wires and/or coaxial tubes,
used as a telecommunications medium. It is sometimes referred to
as "multiconductor cable."
Carrier (as an adjective): Of or pertaining to a technique for
dividing a circuit, lane, supergroup, group, or channel into por-
tions which can be used independently of and simultaneously with
all other portions. Different frequencies or different pulses are
selected for each portion to "carry" the information to be trans-
mitted, after alternation by the information frequencies. The car-
rier itself need not be transmitted.
Channel: A portion, electrical or physical, of a telecommunications
circuit, lane, supergroup, or group which can be used to transmit
information independently of and simultaneously with all other
portions. A channel may be used to provide two or more subchannels.
Circuit: A telecommunications connection between two or more distant
points by a wire, cable, or radio medium facility used to carry in-
formation. The circuit is the fundamental telecommunications con-
nection between distant points. By the application of appropriate
techniques, a circuit may be arranged in many different combinations
to meet the need for various kinds and quantities of telecommunica-
tions service. In its simplest form a circuit may carry only single
telecommunications units in sequence. In its most complex form it
may by apportionment carry sinultaneously thousands of telephone
channels and telegraph subchannels; a number of television programs;
and other specialized kinds of service, such as high-fidelity broad-
cast programs, radar signals, and data-processing signals.
For the most complex application, a circuit is often ar-
ranged into lanes, each of which can carry, in 1 direction, 1 tele-
vision program or 600 telephone channels. In turn, these 600 tele-
phone channels are subdivided into 10 supergroups of 60 telephone
channels each. Each supergroup is subdivided into 5 groups of 12
telephone channels each. One or more telephone channels may be fur-
ther subdivided into three to twenty 60-word-per-minute teletype sub-
channels. Other specialized kinds of service may be accommodated by
combining two or more telephone channels.
the higher the frequency. Wave length is usually measured in linear
units of the metric system.
** Kilocycles per second, or 1,000 cycles per second.
*** Megacycles per second, or 1 million cycles per second.
**** It is becoming common usage to refer to waves (frequencies) in
these three bands as "microwaves."
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Coaxial (as an adjective): Of or pertaining to a modern telecom-
munications cable medium technique using one or more tubes (some-
times called "pipes"). Each metal tube surrounds a conducting wire
supported concentrically by insulators. The space in the tube
usually contains nitrogen gas under pressure. Generally, coaxial
cable is used for the transmission of information in complex form,
such as radar, computer data, or television signals, and/or for the
transmission of telephone channels and telegraph subchannels. A
single tube usually carries information in only one direction at a
time. The capacity of a tube depends in part upon the distance be-
tween repeater stations. In the standard facility, which may have
from 2 to 8 tubes in the cable, a single tube carries a lane of
600 telephone channels or 1 television lane, for which the repeater
station spacing is about 7 statute miles. In a new developmental
coaxial cable facility, a single tube may carry 3 lanes of a total
of 1,800 telephone channels or 3 television lanes, for which the
repeater station spacing is expected to be about 3 statute miles.
Electronics: A general term used to identify that branch of elec-
trical science and technology that treats of the behavior of elec-
trons in vacuums, gases, or solids. Today, telecommunications makes
extensive use of electronic technology.
Facility: An association of apparatus, material, and electrical
energy required to furnish telecommunications service. '
Facsimile (as an adjective): Of or pertaining to a telecommunica-
tions (telegraph) service in which photographs, drawings, hand-
writing, and printed matter are transmitted for graphically recorded
reception. In one method (Type A), images are built up of lines or
dots of constant intensity. In another method (Type B), images are
built up of lines or dots of varying intensity, sometimes referred
to as "telephoto" and "photoradio."
Feeder (as an adjective): Of or pertaining to telecommunications
facilities of relatively low capacity which join facilities of rela-
tively high capacity. (See Main.)
Frequency: The rate in cycles per second at which an electric cur-
rent, voltage, wave, or field alternates in amplitude and/or
direction. (See Band.)
Frequency modulation (FM): The process by which a selected carrier
frequency is varied in frequency by other frequencies that contain
the information to be transmitted in telecommunications. (See
Amplitude modulation.)
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Functional (as an adjective): Of, pertaining to, or connected with
special, unique, or particular telecommunications facilities
managed and operated by a singe agency, organization, company,
department, committee, ministry, or other entity, in contrast to
the facilities of a basic system.
Group: A number of channels (usually 12) or subchannels combined
(multiplexed) electrically in building up the total capacity of a
telecommunications circuit, lane, or supergroup.
Ionosphere: Those layers of the earth's atmosphere occupying the
space about 210 statute miles in thickness extending from about
30 statute miles above the earth's surface to the outer reaches
(exosphere) of the atmosphere. Reflection from these layers makes
possible long-distance transmission of radio signals. The layers,
however, are responsible for fading of signals, skip distance, and
differences between daytime and nighttime radio reception. They
are also used as a scattering reflector for ionosphere scatter-
transmission techniques to transmit to distances of about 1,000 to
1,500 statute miles.
Joint facility: A telecommunications facility owned, controlled, or
operated by two or more agencies, organizations, companies, depart-
ments, committees, ministries, or other entities.
Lane: A 1-way portion, electrical or physical, of a 2-way tele-
communications circuit which can be used independently of and simul-
taneously with all other portions. The largest lane today can handle
600 telephone channels or 1 television program. In some applications
the direction of a lane may be reversed.
Leased (as an adjective): Of or pertaining to the direct operation
by a user of a telecommunications facility owned by another agency.
Line: A general term used to delineate a telecommunications circuit
facility (wire, cable, or radio).
Main (as an adjective): Of or pertaining to telecommunications facili-
ties at and between principal cities and centers which have relatively
high capacity compared with feeder facilities. (See Feeder.)
Medium: Any substance or space that can be used practically to trans-
mit a form of electrical energy for the purpose of providing tele-
communications service.
Microwave radio relay (as an adjective): Of or pertaining to a radio
medium technique in modern telecommunications employing radio
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frequencies higher than 300 mc. These frequencies do not normally
afford practical direct transmission to great distances, princi-
pally because they do not bend well around the earth's surface and
because they do not reflect well from the ionosphere. They are,
however, capable of reliable transmission from horizon to horizon
(line-of-sight) by the use of special antennas which concentrate
the radio energy and give it desired direction. Great distances
can, in consequence, be reached by this technique by the inter-
position of relay stations along the route of the line with a
spacing interval of from 25 to 40 statute miles, depending upon
terrain conditions. This technique can be employed practically
to carry from a small number of telephone channels and telegraph
subchannels to thousands of such channels and subchannels through
2 or more lanes and to carry 1 or more television and other special-
ized lanes and channels. (See Band.)
Mobile (as an adjective): Of or pertaining to a telecommunications
facility which is intended to be operational while in motion or
during halts at unspecified points. (See Portable.)
Modulation: The process of altering a carrier frequency or carrier
pulses by other frequencies or pulses representing the information
being transmitted.
Multiplex (as an adjective): Of or pertaining to the combining of
information signals, modulated or unmodulated, of two or more lanes,
supergroups, groups, channels, or subchannels for transmission over
the same circuit.
Network: An interconnection, electrical or physical, of two or more
circuits or portions thereof for the purpose of facilitating tele-
communications service.
Point-to-point (as an adjective): Generally, of or pertaining to tele-
communications service between fixed points, using the radio medium.
Portable (as an adjective): Of or pertaining to a telecommunications
facility which can be readily moved from place to place but is not
normally operational while in motion. (See Mobile.)
Private (as an adjective): Belonging to or concerning an individual
person, organization, institution, or activity; not public or common.
Pulse: A spurt of electrical energy of extremely short duration
?7171-ally measured in millionths of a second), yet capable of being
used in telecommunications to transmit information.
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Quad: In a mUlticonductor telecommunications cable, the physical asso-
ciation of a group of 4 conductors in any one of various arrangements
for the purpose of providing 2-way multichannel operation.
Reception base: The aggregate telecommunications receiving facilities
employed in providing a broadcast service.
Route: The geographical path followed by a wire, cable, or radio line.
Scatter (as an adjective): Of or pertaining to a radio medium tech-
nique in modern telecommunications by which energy in radio fre-
quencies above 30 mc is deliberately scattered into one or the other
of two reflecting portions of the atmosphere (troposphere and iono-
sphere) at a predetermined angle such that a usable portion of the
energy arrives at the desired receiving location. This technique
is especially applicable to regions in high latitudes (Arctic and
Antarctic) where facilities of other media suffer from the rigors of
weather and terrain and where the conventional long-distance radio
media of the lower frequency bands (200 kc to 30 mc) are subject to
serious disruptive propagational anomalies. (See Band.)
Subchannel: A portion, electrical or physical, of a telecommunica-
tions channel which can be used independently of and simultaneously
with all other portions. An appreciable number of telephone channels
can usually be subchanneled to carry from three to twenty 60-word-
per-minute teletype subchannels on each telephone channel so employed.
Subscriber: Any customer who directly operates telecommunications
apparatus in obtaining telecommunications service.
Supergroup: A number of groups (often five) combined (multiplexed)
electrically in building up the total capacity of a telecommunications
circuit or lane.
System: All of the facilities and networks managed by a single agency,
organization, company, department, committee, ministry, or other
entity in rendering either functional or basic telecommunications
service.
Telecommunications: Transmission, reception, or exchange of informa-
tion between distant points by electrical energy over a wire, cable,
or radio medium facility to produce telephone, telegraph, facsimile,
broadcast (aural and visual), and other similar services.
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Teletype (as an adjective): Of or pertaining to a technique for
effecting telegraph service by the use of an apparatus similar to
a typewriter in which information is transmitted by keyboard and
received by type printer on a roll of paper or a roll of tape, or
by perforations on a roll of tape, or by both. (Sometimes called a
"teleprinter" or "teletypewriter.")
Transmission base: The aggregate telecommunications transmitting
facilities employed in providing broadcast service.
Transistor: A modern device which is capable of performing in a solid
(germanium or silicon) many of the functions performed by the con-
ventional electronic tube in a gas or vacuum.
Troposphere: The layer of the earth's atmosphere occupying the space
from the earth's surface to a height of about 6 statute miles. This
layer is used as a scattering reflector for tropospheric scatter
transmission techniques to distances of about 200 to 500 statute miles.
Wave guide (as an adjective): Of or pertaining to a telecommunica-
tions medium, now under development in several countries, which may
be capable of transmitting extremely large amounts of conventional
and complex information. It consists of a circular or rectangular
hollow metallic tube in which electrical energy travels in the form
of waves, much as do sound waves in a speaking tube.
Wire diffusion: Distribution of broadcast programs by a wire or
cable medium to wired loudspeakers.
Wired Loudspeaker: A telecommunications loudspeaker which receives
from a distribution point one or more broadcast programs by a wire
or cable medium.
Wireline: A general term used to identify a line consisting of either
an aerial cable (and/or separate wires) or an underground cable, used
as a telecommunications medium.
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