Our markets

MTS Russia

With over 140 million people and a relatively diverse economic base, Russia is MTS’ largest market. Demand for wireless communications services in Russia has grown rapidly over the last ten years. As of June 30, 2015, overall wireless telecommunications penetration in Russia stood at 170% (or 242.3 million subscribers) and MTS is the leading mobile operator in Russia with a 31% market share according to AC&M-Consulting.

At the end of 2009, MTS adopted the 3i Strategy with the aim of becoming an integrated telecommunications player to capture additional growth in the fixed-line space through provision of broadband Internet, pay-TV and traditional telephony services. In line with the new strategy, the Company acquired Comstar-UTS, the leading supplier of integrated telecommunication solutions in Russia and the CIS, and additional broadband providers throughout Russia. To reinforce these efforts and to strengthen the overall business, MTS has also restructured its retail operations by significantly expanding the Company’s proprietary sales and distribution network both organically and through the acquisition of several national and regional retail chains.

Key growth factors include:

  • A growing economy
  • Rising disposable incomes and a growing middle class
  • Relatively low broadband penetration
  • Prevalence of multi SIM card usage
  • Retail presence and handset sales
  • Rising demand for fixed and mobile broadband Internet access
  • Data traffic growth
  • Proliferation of smartphones and other data devices

In recent years competition has evolved to exist primarily between MTS and two other major players, each of which provides significant coverage throughout Russia. In addition, MTS competes with local GSM, D-AMPS and CDMA operators in several Russian regions.

Competition in the market is based upon:

  • Local tariff prices
  • Data packages
  • Network coverage and quality
  • Brand perception
  • Distribution dynamics
  • Level of customer service provided
  • Roaming and international tariffs
  • Value-added services
  • Bundles
  • Frequency and license allocation

MTS Ukraine

Wireless penetration in Ukraine was at 131%, or approximately 59.5 million subscribers, at the end of Q2 2015. MTS Ukraine (formerly UMC) is one of the largest wireless providers in the country, with a 34% market share and 20.3 mln customers, according to AC&M-Consulting. The Company is actively developing mobile Internet access following the commercial launch of wireless broadband Internet services based on the CDMA-450 REV A technology.

Competition in the market is primarily based on:

  • Service offers
  • Network quality
  • Pricing
  • Brand perception
  • Frequency and license allocation

MTS Armenia

In September 2007, MTS acquired an 80% stake in K-Telekom, a mobile operator in Armenia operating under the Viva-Cell brand and offering wireless services using GSM 900 and GSM 1800 technologies throughout the territory of Armenia. In October 2007, K-Telekom was allocated frequencies valid for 10 years to offer 3G services in the UMTS standard on the entire territory of Armenia.

At the end of Q2 2015, the overall wireless penetration in Armenia was 111%. As June 30, 2015, Viva-Cell had 2.1 million subscribers and a 59% market share, according to Company’s estimates.

MTS Turkmenistan

In June 2005, we commenced operations in Turkmenistan through our wholly owned subsidiary BCTI. By December 2010, BCTI became the largest telecommunications operator in Turkmenistan providing services to more than 2.4 million subscribers. In December 2010, our operating licenses were suspended. In August 2012, we resumed our operations in this market through MTS’s wholly owned subsidiary MTS-TURKMENISTAN. By the end of Q2 2015 wireless penetration in Turkmenistan reached 101% or 5.4 mln subscribers, As of June 30, 2015, MTS was servicing 1.6 mln customers representing 30% of the market according to the Company`s estimates.

Contact investor relations:

+ 7 495 223 20 25 ir@mts.ru

MTS Investor Relations
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