MTS blog


Monday, November 29, 2010

We have recently launched the first MTS-branded Android handset, the MTS 916, through our retail network. It’s a 3G enabled phone with a 3.4 megapixel camera and a 2.8 inch screen. At RUB 5,990, the smartphone currently provides buyers in the Russian market with the lowest entry price as devices with similar functions are in the range of RUB 7,000–30,000. 

In line with the global trends, Android phones are becoming increasingly popular in Russia. According to the data compiled by MTS, sales of Android phones in the third quarter of 2010 accounted for 18% of the overall smartphone sales in Russia. This is expected to reach 25-30% by year’s end.

MTS-branded phones are in great demand on the back of affordable prices and unique value propositions. In September 2010 sales of MTS-branded handsets constituted around 17% of the sales in our retail network. To see the full list of MTS-branded handsets, please follow the link.

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Thursday, November 25, 2010

Mikhail Shamolin, President and CEO of MTS, has met with Dow Jones columnist Paul Sharma. Mikhail talked about MTS’ focus on data usage and highlighted the untapped potential of machine-to-machine communications. He also mentioned that the Company’s aim is to become a content aggregator, selling TV and local on-demand content through multiple interfaces.

Please see below the link to the Dow Jones Investment Banker article:

The Wall Street Journal, Russia’s MTS Eyes Data Over M&A

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Tuesday, November 09, 2010

On October 27, 2010, Alexey Kornya, Vice President and Chief Financial Officer of MTS, presented at the 7th Annual Russian CFO Summit hosted by the Adam Smith Conferences in Moscow. In his presentation, Alexey provided an overview of MTS’ policies aimed at optimization of the debt portfolio.  He highlighted the fact that the average cost of debt has been reduced from 11.2% in September 2009 to 8.4% in October 2010 while the average maturity of the loan portfolio has been increased from 3 to 5 years (slide 14 in the attached presentation). In line with the Company’s preference for ruble denominated debt the currency structure of liabilities has been rebalanced. According to Mr. Kornya, by the end of 2010 the foreign currency denominated debt will constitute less than 30% of the Company’s liabilities (slide 15).

A PDF version of the presentation (in Russian) can be found below for review.

 Adam Smith Conferences Presentation

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Tuesday, October 26, 2010
Today, we have released our subscriber numbers for the month of September 2010. Below is a table outlining the dynamics of our customer base.

Subscribers (mln) Sep 30, 2010 Aug 31, 2010 Growth
Sep 30, 2009 Growth
Total consolidated subscribers, eop 100.56 99.57 1.00 1.0% 96.86 3.71 3.8%
Russia 69.67 69.11 0.57 0.8% 68.70 0.97 1.4%
Ukraine 18.15 17.99 0.16 0.9% 17.78 0.37 2.1%
Uzbekistan 8.16 7.96 0.21 2.6% 6.79 1.37 20.2%
Turkmenistan 2.39 2.33 0.06 2.4% 1.50 0.88 58.9%
Armenia 2.19 2.18 0.01 0.6% 2.08 0.11 5.5%
MTS Belarus1 4.64 4.62 0.03 0.6% 4.52 0.12 2.7%

Subscriber data for Russian mobile operators is compiled by Advanced Communications and Media, a management consulting and research agency specializing in telecommunications and media. You can view their September subscriber report here.

1 MTS owns a 49% stake in Mobile TeleSystems LLC, a mobile operator in Belarus, which is not consolidated.

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Monday, October 18, 2010

Today we are issuing a report on mobile retail in Russia during Q3 2010, based on the estimates from our mobile retail network. You can download it here.

Highlights from the report:
- MTS estimates that during Q3 2010 the sales of handsets in Russia in terms of the units sold will increase by 34% compared to the same period of 2009 and by 33% compared to Q2 2010
- We expect around 9.78 mln devices to be sold during the quarter
- We estimate that the average retail price of the handsets will increase for the first time in a few quarters. The share of phones priced at under 5 000 rubles constitutes around 77% of total units sold during Q3 2010.
- During Q3 2010, according to our estimates, the market share of the MTS mobile retail network (excluding franchise stores) in terms of handsets sold will reach 14.1% (an increase of 5 percentage points compared with Q3 2009)
- In Q3 2010, the MTS-branded MTS 236 was the most popular device sold through the MTS retail network, accounting for 10.8% of total units sold

Please download the compete report here:

 Mobile retail report Q3 2010

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Thursday, October 14, 2010


It was recently announced that the Moscow City Telephone Network (MGTS), the incumbent PSTN operator in Moscow and owned by Mobile TeleSystems (MTS) through its majority ownership of Comstar-UTS, will invest RUB 13 billion in the modernization of its fixed line network between now and 2013. The digitalization will allow the company to decrease its maintenance costs for analogue exchanges, modernize its business processes, optimize employee levels and boost overall efficiency.

We asked Sergey Ivanov, the CEO of MGTS, to elaborate on what the company plans to accomplish through the modernization program.

What is the percentage of digital lines in the MGTS network, and when does the company plan to complete the digitalization process?

As of the beginning of 2010, 63% of our active lines were digitalized. If we maintain the current pace of modernization, we will be able to reach the 100% level by the end of 2013.

How are you going to utilize the space that will become free following the replacement of analogue equipment with digital lines?

A significant effect from the execution of our modernization program will be the freeing up of space from under the automatic telephone exchanges through use of more compact equipment. We are already leasing out 50 000 sq. meters of office and utility space, which brings in more than RUB 0.5 billion of extra revenue annually. We expect this number to increase to up to RUB 2 billion during 2011-2013 as we continue to modernize the network. We are considering different options of utilizing unoccupied spaces, most of which are located in areas with significant investment potential, including leasing out the space outright, leasing it out after making minimal investments, or modernizing the space before leasing it out.

Starting this year, the numbering capacity being introduced is based on the IP Multimedia Subsystem (IMS) technology. Which new services will be made available to subscribers with the introduction of this technology, and when do you expect to launch them?

Based on this technology, an IMS gateway will be installed in each apartment that will provide access to modern fixed-line services (landline, Internet access, and IPTV) as well as additional high quality services (caller ID, call waiting, call forwarding, SMS, etc.).

How does MGTS as the main provider of fixed-line services and a key player in the broadband market benefit from the IMS technology?

IMS is a technology that enables us to simultaneously digitalize the MGTS network and to deliver broadband access to every single apartment in Moscow. Every apartment connected using the IMS technology will have broadband access – both fixed broadband and wireless using Wi-Fi – on top of the regular landline. Once the IMS gateway is installed, it becomes much easier to connect various services, in fact it is already connected, and it is only a matter of actually starting to use it. The IMS technology enables us to significantly decrease investments in network digitalization and to employ innovative technologies.

The MTS infrastructure also uses the IMS technology. Are there any synergies to be realized from MGTS introducing IMS?

The IMS architecture provides a base for convergent solutions for both fixed and mobile services. At this stage we are building up the technological base, but subsequently we will be offering our subscribers convergent solutions, including IMS-based ones.

How will MTS boost sales through integration with MGTS? How does the Group cross-sell services and which bundled offerings will be available to the subscribers?

Already today customers can pay for MGTS’ fixed-line services (local and long distance calls, broadband and TV) and MTS’ mobile services using a unified MGTS bill; payments can be made in the MTS stores. In addition, MTS SIM-cards are distributed in the MGTS offices. In early 2010 sales of a broadband package from MGTS were launched through the MTS retail chain. In the future we will be offering more bundled services.

(Text translated from Russian to English by MTS)

Please download the MGTS presentation here:

 Modernization of the MGTS

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Friday, October 08, 2010

We have recently launched in Russia a new service called EasyPayment. The subscribers can now pay for different  services, both MTS’s and other companies’ using their mobiles by transferring funds from either their bank or personal accounts with MTS. EasyPayment allows payments for municipal services, cable TV, landline, Internet and many others with low to no commission.

Each transaction takes 1-2 minutes with the minimum transaction amount equal to RUB 10 and the maximum to RUB 15,000 for payments from a MTS personal account and up to RUB 30,000 for payments using a bank account.

The user interface for payments allows a greater degree of flexibility as subscribers can now use special applications developed for handsets on the Windows Mobile, Symbian and iPhone operating systems. The Android version is currently being developed. The applications can be downloaded following receipt of a SMS message containing a link to the download page. iPhone users can find the application in the Apple App Store. The subscribers also can make payments using a web-portal or the USSD-service*.

For EasyPayment, MTS partnered with the Bank of Moscow, 1st Processing Bank, a supplier of e-commerce solutions Intervale and the QIWI payment system.

EasyPayment is an improvement from a previous service MTS-Pay that was launched in October 2008 and allowed subscribers to only transfer funds using their bank accounts. In June 2010 we won the prestigious Global Telecoms Business Innovation Award in the “Consumer bank-card innovation” for MTS-Pay.

We consider the mobile payment market in Russia to have good growth prospects on the back of strong existing demand. Given the country’s high wireless penetration and the relatively low credit card penetration and indeed use, services such as MTS’ EasyPayment that allow to use mobile accounts to make payments could play an important part in the development of mobile commerce in Russia. Our projects in this field include money transfers (launched in April 2010); as well as the partnership with the Moscow Metro allowing passengers to buy  tickets using their mobiles at the turnstiles utilizing the NFC** technology (tentative launch at the end of 2010).



* USSD - Unstructured Supplementary Service Data.
** NFC - Near Field Communication.

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Monday, October 04, 2010

Global Telecoms Business (GTB), a leading telecommunications trade magazine, ranked MTS President and CEO, Mikhail Shamolin, the 26th most powerful telecommunications professional globally in its annual “Power 100” list of leading industry executives. The 2010 ranking, determined by reader-submitted nominations, is an improvement from last year’s placing of Shamolin at #29. GTB acknowledged several milestone achievements at MTS over the past year as the cause.

GTB wrote:

“Mikhail Shamolin is the president and CEO of MTS, which operates in Russia and the CIS. Since May 2008, Shamolin has driven corporate transformation through MTS’s entrance into fixed-line services through the acquisition of Comstar-UTS, the provider of integrated telecommunication solutions in Russia, and the launch of, an online content portal.

“During Shamolin’s tenure, first as head of MTS’s Russian business and then CEO of MTS, the company’s core markets have delivered nearly 20% compound annual revenue growth since 2005 and developed into the world’s ninth largest telecommunications company by subscriber numbers.”

The full 2010 ranking is available on GTB’s website.

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Tuesday, September 28, 2010

The Russian business daily Kommersant has recently published its 11th Annual Ranking of Russia’s Best Managers. We are happy to announce that three of MTS’ top executives were selected as leaders in their respective categories. Mikhail Gerchuk, Vice President and Chief Commercial Officer, was chosen as the Best Marketing Director for the year 2010. Sergey Nikonov, Vice President for Human Resources and Administration, was recognized in the Best Human Resources Director category, and Ruslan Ibragimov, Vice President for Corporate and Legal Matters, was selected as the Best Corporate Governance Director.

The ranking is Kommersant’s joint project with the Russian Managers Association, a nation-wide independent non-governmental organization, which identifies the best professionals in Russia among managers across different industries based on the evaluation of their professional reputation during the year. The rating also takes into consideration the weight of each candidate’s industry in the country’s gross domestic product and his/her citation index in Russian mass media. The initial number of candidates in the running for this rating at times exceeds 5,000 people. This number is then reduced to 2,000 and then to 1,000 for final consideration. The principle of the rating is simple – "The Best choose the best" – with the jury made up of industry experts.

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Tuesday, September 21, 2010
Today, we have released our subscriber numbers for the month of August 2010. Below is a table outlining the dynamics of our customer base.

Subscribers (mln) Aug 31, 2010 Jul 31, 2010 Growth
Aug 31, 2009 Growth
Total consolidated subscribers, eop 99.57 99.21 0.35 0.4% 96.17 3.40 3.5%
Russia 69.11 69.30 (0.19) (0.3%) 68.26 0.85 1.2%
Ukraine 17.99 17.71 0.29 1.6% 17.77 0.22 1.2%
Uzbekistan 7.96 7.81 0.15 1.9% 6.67 1.28 19.2%
Turkmenistan 2.33 2.24 0.09 3.8% 1.41 0.92 65.3%
Armenia 2.18 2.15 0.02 1.2% 2.05 0.12 6.0%
MTS Belarus1 4.62 4.60 0.02 0.5% 4.50 0.12 2.6%

Subscriber data for Russian mobile operators is compiled by Advanced Communications and Media, a management consulting and research agency specializing in telecommunications and media. You can view their August subscriber report here.

1 MTS owns a 49% stake in Mobile TeleSystems LLC, a mobile operator in Belarus, which is not consolidated.

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