MTS blog


Thursday, September 17, 2009

Last week, we launched – an online and mobile content portal that offers the largest selection of licensed videos, music and games. The goal behind this is to further stimulate our content revenues, which already contribute significantly to our performance. For example, content revenues for the full year 2008 were around 9 billion rubles with the second quarter 2009 revenues growing 31% year-on-year.

The new content portal is unique to our markets as it offers a high degree of interoperability between mobile devices and PCs / laptops as well as the necessary flexibility in terms of access network (e.g. EDGE vs. 3G) and phone model. also offers a “dual delivery” system, whereby purchased music tracks can be downloaded to both a mobile device and a computer.

Given the nature of our business, MTS is best positioned to offer paid content as we already have the necessary financial arrangements with our subscribers and can utilize their pre-paid accounts for content purchases. This differs from the Western markets where the vast majority of content stores rely on credit card payments whereas the Russian credit market is still its early development stages.

By the virtue of our customer base and brand recognition, our content portal has already become a major force in the Russian Internet space. In test mode since April 2009, the portal attracted around 1.5 million users. It must be noted that there is a lack of legal content providers in Russia at the moment, and piracy is widespread. MTS is one of a few companies able to sign partnerships with the entertainment industry’s major players. Recently, we signed an agreement with Paramount Pictures that allows our customers to watch streaming videos for free and download them for a price lower than they would pay for a pirated copy on the streets.

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Tuesday, September 08, 2009

As we have discussed before on this blog, we believe that distribution of exclusive and innovative handsets through the MTS monobrand retail network is key to subscriber acquisition, usage growth and customer retention. For Russian consumers, the purchase of a handset is very much an emotional purchase that we see as being key in strengthening their ties with MTS in order to encourage more loyal behavior. By signing exclusive deals with leading device manufacturers, we will be able to drive greater customer traffic to MTS stores and gain competitive advantage over our peers. Selling handsets through MTS stores will also allow us to customize these phones and pre-install handset-specific software and applications to drive data and content usage.

Over the past couple of weeks, we have launched a number of new phones:

The new MTS-branded phone, MTS 236, is the first device to be sold in Russia under the MTS brand through the partnership with Vodafone. The phone was developed by ZTE for Vodafone. MTS 236 is an entry-level phone, priced at RUB 890 (around $28), that will be offered with a Super Zero tariff.

HTC Hero (promo site:, the first Android phone to be sold in Russia, is arriving to our retail network this week. For the first month, the phone will be sold exclusively through our stores with an introductory offer of free 100 Mb Internet traffic for three months. The phone features such high-end specifications as multi-touch touchscreen, 3G HSDPA/WCDMA capability, Wi-Fi and a 5 megapixel camera with autofocus. It will be sold for RUB 22,990 (around $733).

Samsung BEATDJ (promo site:, the new flagship Samsung device aimed specifically at music fans. The phone is to be sold exclusively at MTS stores for a month following the launch, and we are offering a few music tracks for free to encourage usage of our online content store, (more on that in upcoming blog posts). The phone features multi-touch touchscreen, 3G HSDPA/WCDMA access, 3 megapixel camera and a 50 Mb internal storage capacity. It is priced at RUB 14,990 (around $478).

By the end of the year, we will launch more MTS-branded phones that we will deliver through the Vodafone partnership. We aim to continue to offer exclusive flagship devices such as Nokia N97 or HTC Hero in our markets.

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Thursday, September 03, 2009
MTS recently won the 2009 Summit Marketing Effectiveness Award for our customer segmentation. We were recognized in the Consumer Services category for the robust approach we took to deliver most suitable products and services across our footprint of 6 countries with a total population of over 230 million. We became the first company in our markets to be recognized for customer segmentation, a testament to the fact that we have implemented world class solution.

To develop our customer segmentation, we have partnered with Kantar, one of the world's largest insight, information and consultancy networks. In fact, you can view a case study of the work we have done together on their website:

Approaching six markets with significant economic and cultural differences, we intended to create a common language and a consistent platform that would allow us to offer better tailored services as well as make our marketing effort more efficient. This overarching platform was meant to guide the development, implementation and evaluation of all our marketing initiatives and improve marketing effectiveness of the MTS Group.

To this end, we have implemented multi-market macro segmentation, aiming for unique consistency of approach and a new level of accountability. Our segmentation is based on the needs, attitudes and the actual usage dynamics, taken both from market surveys across our markets and customer databases, allowing to define segments more consistently and address them with maximum efficiency.

A particularly unique aspect of our segmentation approach, one that’s on the leading edge of global marketing practice, is that it is directly linked to our customer base. This allows us to set and measure segment-specific metrics when we launch a new customer offer, such as the size of the segment, revenues, ARPU, MOU and many others.

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Tuesday, August 25, 2009

Earlier in August, we have opened the doors of our new flagship store in Moscow. The new store is located on the first floor of the Evropeiskiy shopping center, one of the more popular locations with the residents of Moscow. Around 190,000 people visit the center daily and over 220,000 per day come there during the weekend, according to the data provided by the shopping center.

The new flagship store is part of the development of MTS’ monobrand retail network in Russia, which includes the acquisition of multibrand retailers, increasing franchisees and the rebranding and optimization of existing locations. The key focus of MTS’ retail strategy is to provide personalized customer service and better tailored products, including exclusive devices bundled with applications developed by MTS. For instance, we have recently launched Nokia’s N97 mobile computer exclusively in our retail network.

The new flagship store has been developed using global best practices. We have particularly benefited from our partnership with Vodafone, whereby we have been able to draw from their experience operating retail networks around the world. The key feature of the store lies in its open lay-out with the majority of the retail space dedicated to handsets and devices. Customer can also handle and test the devices, something that has not been possible in Russian retail before.

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Tuesday, July 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!

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Wednesday, June 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 –

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).

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Thursday, June 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.

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