Our markets
MTS Russia
With 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. At December 31, 2010, overall wireless telecommunications penetration in Russia stood at 151% (or 219 million subscribers) versus 143% (or 208 million subscribers) at the close of 2009, 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 fixed-line and Internet penetration
- Prevalence of multi SIM card usage
- Retail presence and handset sales
- Rising demand for fixed and mobile broadband Internet access
- Data traffic growth
- Increasing content consumption
- 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
The Ukrainian wireless telecommunications market has grown rapidly in recent years largely due to:
- Broader economic recovery in Ukraine
- Competition with entry of new players
- A benign regulatory environment
Overall wireless penetration in Ukraine increased from 120% to 118%, or approximately 54.1 million subscribers, in 2010. MTS Ukraine (formerly UMC) is one of the largest wireless providers in the country, with a 33.7% market share (Penetration data 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 Uzbekistan
MTS is the number one provider of mobile phone services in the country, with approximately 8.8 million subscribers accounting for nearly 42% of the Uzbek market. According to the Company’s estimates, in 2010 overall wireless penetration in Uzbekistan increased to 73% from 57%. MTS continues to expand its service portfolio as the Company builds out its 2G and 3G networks. In July 2010, MTS was the first in the CIS to launch a fully operational 4G network in Tashkent, the capital of Uzbekistan.
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. As of December 31, 2010, Viva-Cell had 2.5 million subscribers and a 69% market share according to AC&M-Consulting. At the end of 2010, the overall wireless penetration in Armenia was 112%, or approximately 3.6 million subscribers, according to AC&M-Consulting data.
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.