MTS blog


MTS Q2 2009 RESULTS

четверг, августа 13, 2009
On August 11, we disclosed our financial results for the second quarter 2009. As always, we posted a lot of information about the results on our website – the press release, the presentation and the Excel spreadsheet with summary financial information for 2004-2009. In the presentation, we have included detailed slides about our future strategic priorities, logic behind the intent to acquire a controlling stake in COMSTAR-UTS (see the original press release), as well as more insight into our retail development and handset distribution in Russia.

On the conference call, we have commented that there was a general improvement in our operating environment in Q2, aided by seasonal and organic growth factors. The Group recorded 12% q-o-q revenue growth to over $2.0 billion US dollars, driven by 2.8 million new subscribers and a seasonal improvement in usage.

Group OIBDA increased by 15% q-o-q to $953.8 million. Margin on our service revenue was over 50% as growth was aided by the seasonal pick-up in revenue, tighter cost control on SG&A expenses and the appreciation of the Russian ruble during the period. As we have forecasted, our build-out of our monobrand retail has put additional cost pressures on our margins, with the cumulative negative effect on the Group margin of 3.4 percentage points for a total margin of 47.2%. We witnessed significant improvement in the profitability of our Ukrainian business unit as well.

Our revenues in Russia grew 9% q-o-q to 51 billion rubles due to strong subscriber additions and a positive impact from seasonal usage. We are seeing significant subscriber additions through our greater use of alternative sales channels, such as temporary stands, kiosks and so forth. At the same time, we are currently in the build-out stage of our monobrand network, which delivers higher-value customers as ARPUs are 20% higher on average.

Given the changes we see in our markets and the initiatives by which we are fostering growth in our markets, we also elaborated on our strategic direction, introducing our concept of 3i to our shareholders. 3i focuses on three principles that will govern future growth at MTS: integration, Internet and innovation. Be sure to check out our presentation for more information.

With the disclosure behind us, we will be posting more information here on our blog about our new monobrand stores and overall retail strategy, as well as updates about our proposed acquisition of Comstar-UTS, in the coming weeks. Будем на связи (Budem na svyazi!), or we'll be in touch soon!

Tags: , , , , , , , ,

MTS APPLYING ALTERNATIVE ENERGY TO BASE STATIONS

среда, июля 15, 2009

Windmill powering base station in Karelia, Russia.

In our continuous efforts to improve operating efficiency, MTS is increasingly looking towards alternative solutions to minimize energy consumption. In the coming months, MTS will install pilot base stations in the Crimea peninsula in the Southern Ukraine that will be powered by environmentally friendly wind generators. We have purchased wind turbines from the US-based Bergey Windpower and have already begun the deployment.

In line with our reputation for innovation, MTS is the first operator in Ukraine to explore the potential of energy solutions friendly to the environment. The first base stations will be installed in Crimea and later in the Western Ukraine, as strong winds in these regions are present throughout the year. Such alternative energy solutions allow us to economize spending as electricity costs rise or deploy network solutions in areas underserviced by a lack of power infrastructure.

We have long been exploring alternative energy sources in Russia. For instance, as pictured above, one of our base stations in the northern Karelia region is powered by wind, while in the southern Krasnodar region we have deployed solar cells. In the Moscow region, we are testing unique solutions with hydrogen power cells.

Tags: , , , , , ,

3G IN THE MOSCOW UNDERGROUND

четверг, июля 09, 2009

Today we have brought 3G to the underground world of Moscow. The first 3G network in the Moscow Metro was launched on Universitet station, named after the nearby Moscow State University.

Moscow Metro is the main public transport of the capital carrying about 9 mln passengers on a typical week day (2008 data, source: Moscow Metro Annual Report 2008). We are certain that gaining access to fast data connections through 3G will appeal to passengers, as they can read the latest news, send emails or browse the Internet using their mobile devices. In order to spur the uptake in familiarity and usage of 3G-enabled services, we decided to launch the first phase of the network on the station where the younger educated crowd is commuting to one of the most prestigious universities in Russia. In fact, we have noticed that in the Russian cities where 3G networks have already been launched, students and young people are some of the heaviest users of the new services enabled by 3G.

Our CTO Andrei Ushatskiy noted today that MTS was the first operator to bring mobile networks to the Moscow Metro in 2000, and that we continue to bring innovative solutions to our customers traveling underground. We are planning to expand 3G networks in the Moscow Metro and cover all the stations on one of the busiest lines, Koltsevaya (Ring Line), during this Fall.

For more information about our 3G network expansion in Russia, please see our post from June 22.

Tags: , , , ,

RECENT MTS ADS

вторник, июля 07, 2009

Here are the two MTS ads that are currently airing in Russia - one about the joint launch of Nokia N97 and the other touting summer roaming offers. Check it out!



Tags: , , , ,

3+1 PROJECT IN BASHKIRIA

среда, июля 01, 2009
Today we have launched a unique pilot project in the Republic of Bashkortostan (Bashkiria), whereby subscribers are offered mobile and fixed telephony as well as broadband Internet services under the MTS brand on a single bill. These services are provided on an opt-in basis to both private and corporate subscribers, offering the ease of use of a single billing system and the greater affordability of the bundled solution.

In Bashkiria, we have deployed one of the fastest broadband solutions currently available, FTTC / VDSL2, with download speeds of up to 100 Mbit / second. This type of connection allows us to bring a multitude of services to subscribers, including HDTV, broadband Internet and fixed telephony. We aim to launch IPTV services in Bashkiria this year as well.

We are the first company in Russia to offer one bill for mobile services, fixed telephony and broadband Internet. We are launching a range of tariff plans for each service with discounts for choosing multiple options. For instance, subscribers to all three services will have a 20% discount on the total bill, and subscribers to two services will get a 10% discount.

We have been developing convergent solutions in Bashkiria since the acquisition of Bashcell in late 2007. Bashcell had the licenses and the networks to provide fixed-line telephony and broadband access, which we have since successfully upgraded to offer best-in-class bundled solutions.

The pilot project in Bashkiria will help us test the demand for convergent solutions in Russia and develop a better customer proposition for future deployment in the country. Given the low penetration of broadband and the reputation of our Company, we believe that bringing high-speed Internet service will be one the key drivers of our growth in the future.

More information about the 3+1 tariffs and services is available here (in Russian).


 

Tags: , , ,

CORPORATE SOCIAL RESPONSIBILITY IN ARMENIA

пятница, июня 26, 2009
Corporate Social Responsibility is not a common term in our markets of operations, but this is mostly due to the difficulty of translation rather than a lack in effort.

The essential function of our company is to provide people with easy and affordable access to some of the most advanced communications channels such as mobile telephony, data and the Internet. With an ambition to become a communications provider of choice, MTS is keen to support activities aimed at improving the lives of communities in our markets of operations. More about our CSR policy can be found here.

 

Our Armenian subsidiary provides a great case study of a local CSR effort. VivaCell-MTS is one of the most admired companies in Armenia as has been shown in its ability to gain market share and build strong relationships with the subscribers

VivaCell-MTS takes deliberate efforts to integrate CSR activities in its day-to-day operations in order to ensure resilient economic and social ties with the local community.

In 2008, our efforts in Armenia were primarily directed at the rural development under the “VivaCell-MTS to the regions” program. MTS helped to connect the local villages to gas and water supply systems, as well as renovate a number of schools and hospitals. In doing so, we were able to provide the population with much needed utilities such as electricity and heating.

In 2009, the theme for our social activities is “VivaCell-MTS to children” that will concentrate on the education, health and overall children’s well-being. We are already actively involved in programs to lower child mortality rates and in promoting environment education in schools throughout Armenia. Given the importance of social, health, environment and other projects to VivaCell-MTS, the Company has formally decided to rename Corporate Social Responsibility (CSR) into Corporate Responsibility (CR), highlighting the fact that our activities spread beyond pure social programs.

Tags: , , ,

3G ONE YEAR ON

понедельник, июня 22, 2009


Over a year ago, MTS announced the launch of its first 3G networks in Russia – in Saint Petersburg, Sochi, Yekaterinburg and Kazan. We have since brought next-generation mobile networks to all seven federal districts of Russia with presence in 32 of largest cities and plans to have over 40 cities covered by the end of 2009. In the cities where we already launched 3G, we continue to add new base stations and expand coverage. During Q1’09, we almost doubled our coverage area in Russia.

The uptake of 3G services is very encouraging:
  • Traffic volume in 3G networks increased 3.2 times q-o-q in Q1’09;
  • Data revenues generated in 3G networks grew 2.7 times q-o-q in Q1’09;
  • Half of the current 3G users consume around 1Gb of traffic per month;
  • Number of 3G users doubled every quarter.

In May 2009, we unveiled the first indoor 3G network in Moscow by launching in Expocentre, one of the largest exhibition centers in Eastern Europe. We are planning to provide 3G network coverage in 35 largest business and shopping centers in Moscow in 2009, including the Domodedovo International Airport, as part of our eventual full network roll-out.

Tags: , , , , ,

NOKIA N97 IN RUSSIA

среда, июня 17, 2009


On June 11, 2009, MTS began selling the Nokia N97 mobile computer in Russia. Of more than 75 countries, Russia became one of the first markets to offer the device.

Based on the strategic partnership agreement with Nokia, the N97 will be initially sold exclusively through the MTS retail chain, as well as Nokia stores, across Russia. To support the introduction, MTS launched a special website to help subscribers familiarize themselves with the device – http://www.n97.mts.ru

MTS has developed a range of exclusive applications for the N97 that includes weather updates, FOREX rates, newsfeeds, blogging tools, maps and dictionaries. These applications will be distributed on a free 2 GB micro-SD memory card to all subscribers purchasing the new phone at the MTS stores.

In addition, we have initiated a joint marketing campaign with Nokia in Russia to promote the device, our first effort in promoting an exclusive device under the MTS brand (an example of a billboard ad can be seen below).

Tags: , , , ,

SALES THROUGH PAYMENT TERMINALS

понедельник, июня 15, 2009
This summer we are launching contract sales through payment terminals. Our first partner is OSMP, the leading payment terminal company in Russia. Their consumer brand, QIWI, is the largest network of terminals accepting payments for a wide range of services, including mobile telephony, Internet services, subscription TV and utilities. The network has around 87,000 terminals in Russia, of which over 20,000 are in Moscow.

Customers topping up their accounts through QIWI terminals will be offered our Super Nol’ tariff plan and a new mobile number. The new MTS subscriber will receive the SIM card and the contract by a courier.
 
We are launching the test project this summer and expect to sell over 87,000 contracts over the first month. Depending on the interest of QIWI customers and the pattern of sales, we will review our relationship with the terminal providers.

It should be noted that while many Western European mobile operators have a high share of sales through the Internet, the low penetration of broadband in Russia limits the effectiveness of that channel. At the same time, over the last few years, payment terminals have expanded throughout Russia and are currently present in the majority of locations with high pedestrian traffic, including grocery stores, Metro stations and other popular public areas.

Tags: , ,

COVERAGE IN TOTAL TELECOM

четверг, июня 11, 2009


Mikhail Gerchuk, Chief Commercial Officer of MTS, was interviewed in the June issue of Total Telecom, one of the most respected telecommunications magazines. Mikhail met with the Total Telecom editor to discuss the BrandZ 2009 ranking, where MTS became the 71st most valuable brand globally and one of the 10 most valuable telecom brands, worth $9.2 billion (see press release, BrandZ website and the report in the Financial Times).

Building the leading communications brand in the CIS has been one of the key objectives of MTS corporate strategy following the launch of the current brand over 3 years ago. This year, we are actively developing our retail presence, by building our own MTS stores and acquiring retailers, such as Telefon.Ru and Eldorado. By moving into retail, the MTS brand will increase visibility and allow consumers a greater degree of interaction with the Company.

The efforts to create the most powerful and recognized brand in our markets of operations reflect the goal of MTS to maintain its position as the leading mobile operator in Eastern Europe and Central Asia. Strong brand is fundamental to a solid business with long-term goals and our brand valuation reflects its importance in stimulating future growth of the Company.

Tags: , , , ,

Recent Tweets

Follow me, Josh Tulgan, MTS Director for Corporate Finance and Investor Relations, on twitter

Twitter декабря 14, 10:55
Contribution of #digital economy in Russia's GDP is 2.1%, while #mobile economy - 3.8% https://t.co/ZWEDIV22PC

Twitter декабря 13, 15:04
Olga Ziborova, Marketing: Growing penetration of our #apps into $MBT sub base supports its stability and loyalty… https://t.co/Bt7P6IYb6m

Twitter декабря 13, 15:03
$MBT expands its #app portfolio in search for new opportunities beyond #telecom #MTSS #digital @rbctv_live https://t.co/6FjMl3Z0WV

Twitter декабря 13, 12:16
$MBT made a speedy foray into Russia's #taxi business #MTSS #MTStaxi #digital https://t.co/wyjB52N32n https://t.co/qnJVTYKMwl

Twitter декабря 13, 12:04
$MBT CMO targets 10% of sales from services other than voice and data #MTSS #digital https://t.co/pYhhr1uukK via @technology

Note: For Customization and Configuration, CheckOut Recent Tweets Documentation