Glossary

ADS
Listed shares of common stock, represented by ADSs on the New York Stock Exchange (the “NYSE”) under the symbol “MBT”. Each ADS represents two underlying shares of our common stock. Prior to May 3, 2010, each ADS represented five shares of our common stock.

ARPU
Average monthly service revenue per subscriber is calculated by dividing the Company’s service revenues for a given period, including guest roaming, interconnect and connection fees, by the average number of subscribers during that period and dividing by the number of months in that period. As of June 30, 2006, the methodology for reporting average revenue per user for our Russian subscribers was changed to include interconnect revenues in the calculation.

CAPEX
Or capital expenditures, include the Company’s purchases of property, plant and equipment and intangible assets.

Churn
Defined as the total number of subscribers who cease to be a subscriber (as defined above) during the period (whether involuntarily due to non-payment or voluntarily, at such subscriber’s request), expressed as a percentage of the average number of our subscribers during that period.

FCF
Free cash flow is represented by net cash from operating activities less cash used for certain investing activities. Free cash flow is commonly used by investors, analysts and credit rating agencies to assess and evaluate our performance over time and within the wireless telecommunications industry. Because free cash flow is not based in US GAAP and excludes certain sources and uses of cash, the calculation should not be looked upon as an alternative to our Consolidated statement of cash flows or other information prepared in accordance with US GAAP.

MOU
Average monthly minutes of usage per subscriber is calculated by dividing the total number of minutes of usage during a given period by the average number of subscribers during the period and dividing by the number of months in that period.

Net debt
Net debt represents total debt less cash and cash equivalents, short-term investments, long-term deposits and currency hedging. Our net debt calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare our periodic and future liquidity within the wireless telecommunications industry. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with US GAAP.

OIBDA
Represents operating income before depreciation and amortization. The Company’s OIBDA may not be similar to OIBDA measures of other companies; is not a measurement under accounting principles generally accepted in the United States and should be considered in addition to, but not as a substitute for, the information contained in our consolidated statement of operations. We believe that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our ongoing business operations, including our ability to fund discretionary spending such as capital expenditures, acquisitions of mobile operators and other investments and our ability to incur and service debt. While depreciation and amortization are considered operating costs under generally accepted accounting principles, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculation is commonly used as one of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the wireless telecommunications industry.

SAC
Subscriber acquisition costs are calculated as total sales and marketing expenses and handset subsidies for a given period divided by the total number of gross subscribers added during that period.

Subscriber
Defined as as an organization or individual, whose SIM-card:

  • shows traffic-generating activity or
  • accrues a balance for services rendered or
  • is replenished or topped off

Over the course of any three-month period, inclusive within the reporting period, and was not blocked at the end of the period.

Contact investor relations:

+ 7 495 223 20 25 ir@mts.ru

MTS Investor Relations
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