MTS blog


Thursday, February 22, 2018

Growing customer demand for digital entertainment services, including video streaming and online TV, has stimulated higher sales of more advanced and premium smartphones. In 2017, the strongest trend in consumer behavior was an upsurge in sales of smartphones priced over RUB 40,000. In monetary terms, this category of smartphones demonstrated an impressive growth of 79% y-o-y. The second fastest growing category were smartphones priced at RUB 20,000 - 30,000, showing a 21% increase compared to 2016. In the RUB 30,000 - 40,000 price segment, sales grew by 15%. At the same time, lower-end devices priced below RUB 5,000 saw a 39% decline in sales.

The popularity of premium smartphones also fueled an overall growth in credit sales which increased by 40% in unit terms and by 74% in monetary terms. The average price of a smartphone bought on credit increased to RUB 19,000 (+24% y-o-y). At the same time, customers this year opted for loans repayable over 24 months sixteen times more often than in 2016 – a period corresponding to the average lifespan of a modern smartphone. Purchase costs distribution over a longer period of time allowed customers to choose premium tariff plans with higher data allowance.

Today, an advanced smartphone helps users manage their daily tasks and serves as a single access point for entertainment, replacing several devices – tablet, camera, music player, e-book and banking card. As a result, consumers are increasingly seeking more reliable and faster handsets which boast high-resolution screens, advanced cameras and NFC functionality. For operators this trend means greater data consumption – in 2017, MTS saw an increase of 252% compared to the previous year.

Kirill Dmitriev, Vice President, Sales and Customer Service, MTS, commented: “We are witnessing a turning point in consumer behavior, with smartphones increasingly seen as integrated hubs of digital life. This drives consumers, even those with low income, to buy more expensive devices so they can access heavier digital content everywhere and at any time. More and more of our subscribers prioritize powerful devices that enable them to watch movies, play games, use social networks, post photos and publish stories on social platforms such as Instagram.

Kirill continued, “To keep pace with evolving customer demand, we offer affordable handsets that provide easy access to digital entertainment. Moreover, at MTS, we are actively developing our own digital ecosystem - mobile music, mobile TV and video-on demand. Our menu of services has been enlarged with e-ticketing service as a result of our recent acquisitions of and”

The average smartphone price at MTS retail stores increased from RUB 9,502 in 2016 to 11,846 in 2017 (+24.7%) which is 13% lower than the average smartphone price on the Russian smartphone market (RUB 13,417). The difference is explained by the fact that MTS retail network keeps prices at minimum, offering its customers the option to choose higher-end devices without typical retail mark-ups.

Among the most popular brands were Samsung, Apple and Honor/Huawei, which collectively accounted for the majority of smartphone sales in MTS retail stores. The overall share of the three manufacturers totaled roughly 85.8% of all gadgets sold in 2017. In 2017, Apple demonstrated solid growth of 1.5x both in monetary and unit terms. One of the main contributing factors was a decrease in retail prices; in Q4 2017, for example, the most popular model on the Russian market was iPhone SE 32GB priced at RUB 18,490 in the MTS retail stores, an annual drop of 40% from the initial price of RUB 33,000 in Q4 2016. Honor/Huawei also boosted its sales showing a 285% and 342% growth in unit and monetary terms respectively. These developments negatively affected Alcatel branded smartphone sales which dropped by 64% in unit terms.

Russian smartphone market in 2017

In Russia, the overall smartphone sales in 2017 amounted to RUB 386 bln (+17.3% y-o-y). In unit terms, retailers together sold 28.4 mln devices (+6% y-o-y) and set a new record, exceeding the previous all-time high of 27.6 mln devices sold in 2014.

Samsung remained the most sought-after brand in 2017. The Korean manufacturer’s market share amounted to 25.2% in unit terms (+3.5 p.p.) and 29.2% in monetary terms (+3.5 p.p.). The main driver for such boost in sales was the successful start of Samsung’s flagship models - Galaxy S8 and S8 Plus.

Apple’s market share at the end of 2017 accounted for 12.8% in unit terms (+1.7 p.p.) and 34.4% in monetary terms (+0.5 p.p.).

The third most popular brand was Honor/Huawei. The vendor's market share demonstrated a strong growth and reached 9.6% (+5.3 p.p.) in unit terms and 8.5% (+4.7 p.p.) in monetary terms. Another rapidly growing player was Xiaomi – the Chinese manufacturer entered the TOP-5, most highly demanded smartphone brands in Russia with a market share of 4.1% (+3.5 p.p.) in unit terms and 3.7% (+2.9 p.p.) in monetary terms.

Tags: , ,

Russian Mobile Retail Report Q2 2017

Thursday, August 24, 2017

The key consumer behavior trend in Q2 2017, arising from MTS Retail analysis, was growth in demand for advanced smartphones priced over RUB 40,000. Consequently, against the background of increasing interest in this category of devices, 60% of high-end smartphones in the MTS retail network were bought on credit.

In Q2 2017, the share of smartphones over RUB 40,000 bought on credit doubled from 32% to 60%. Overall, the sales of smartphones in this category grew 49.5% in revenue and 48.5% in unit terms. 

The overall share of affordable as well as premium category smartphones sold in the MTS retail network increased to 20% of sales in unit terms (+6 p.p.) and 35% in money terms (+13 p.p). The average sale price of smartphones bought on credit increased 22% y-o-y to RUB 18,500 due to larger share of such smartphones in total sales. Meanwhile, the average price of smartphones in general sold through the MTS retail network increased by just 8% to RUB 10,500. 

The growth in sales of smartphones bought on credit was attributable to wide availability of credit facilities including better installment terms under the 0-0-24 and 0-0-36 schemes, the launch of online lending in MTS e-shop, cashback options as well as changes in consumer behavior. The subscribers’ approach towards the acquisition of a new smartphone became more pragmatic: the average lifetime of a device increased from 1.5 to 2 years, with customers preferring to buy more advanced smartphones with longer service life from well-known brands such as Samsung, Apple and Huawei.   

Alexander Mosyakin, CEO of MTS Retail, commented: "We saw that today our customers are not just interested in purchasing a phone, but look for a universal device that assists them with everyday tasks: to buy tickets to the cinema, pay utility bills, watch a video, communicate on social networks etc. More and more people choose smartphones with a larger screen and a better camera. To meet this demand, we have enriched our traditional portfolio of available smartphones with more advanced and reliable models that also enable the full use our digital products such as the e-wallet, cloud services, TV, as well as a range of other apps in the MTS ecosystem. Meanwhile, we continue keeping our prices highly competitive and offer our clients favorable payment conditions and credit options. All this makes an acquisition of a new smartphone an attractive proposition for our customers”. 

As the interest in advanced smartphones is growing, the share of feature phones sold in the MTS retail network is declining: 270,000 devices were sold in Q2 2017, a decrease of 60%. The share of C-branded devices with basic functionality that cannot compete with the leading devices is also in decline.

Samsung, Apple and Huawei are the three key vendors in the MTS retail network. Although Samsung have now devices returned to the shelves of other retail chains, their share in MTS outlets remains high and comprises 32.8% of units sold and 44.4% of revenue. Huawei showed the most impressive growth: its share of retail sales grew from 1% to 17%. Another leader in sales in MTS retail network was Apple: its devices priced over RUB 40,000 sold 2.5 times better in Q2 2017 than a year ago. Meanwhile, the share of Alcatel sales dropped 12.5% in unit terms and 7.5% in cash terms. 


Russian smartphone market 

Samsung remained the most popular cellphone brand in Q2 2017. The Korean manufacturer’s market share was approximately 26% in unit terms (+5 p.p.) accounting for 32.4% of total revenue (+5p.p.). This increase is attributable to the successful launch of the new Galaxy S8. The model’s success allowed Samsung to outsell Apple, its nearest revenue competitor, in the months of May and June. iPhone sales accounted for 32.1% (- 0.3 p.p.) of revenue and 12% (+1 p.p.) of units sold for the reporting period.

The third most popular brand in Russia was Huawei. The company's market share reached 8.4% in unit terms. The number of smartphones by other Chinese manufacturers - LENOVO and ZTE - sold in the Russian market decreased by 4 p.p. and 2.8 p.p. y-o-y respectively for the reporting period. 

The share of smartphones in total handset sales grew to 74% in unit terms (+ 5.5 p.p.) and 96% in money terms. The average price of smartphones sold grew 6% y-o-y to RUB 12,900. 

Overall, in Q2 2017, 6.2 mln smartphones were sold, an increase of 12% to the previous year. The sales of feature phones in Russia declined 16% to 2.2 mln units. The revenue from smartphone sales grew 16% to RUB 79.9 bln, while sales of feature phones decreased 20% to RUB 4.3 bln.  

Tags: , , ,

Russian Mobile Retail Report Q1 2017

Wednesday, June 14, 2017

In Q1 2017, mobile phone sales in Russia grew 6.2% in monetary terms to RUB 79.4 billion. The key trend seen across MTS’ retail network was the outperformance of LTE-smartphone sales, which was driven by favorable purchase terms available for such gadgets. The total number of MTS online store users increased 11% y-o-y. The most rapidly growing segment for the online store was female users aged over 45, which grew by 17% y-o-y.

In January-March, 8.15 million mobile phones were sold in Russia - 6.12 million smartphones (+ 6% y-o-y) and 2.03 feature phones (-21% y-o-y). In Q1 2017, smartphones sales in Russia increased by 7.9% y-o-y to RUB 76.1 billion.

The average market price of mobile devices increased by 7.7% to RUB 9,749. Smartphones’ share of sales was 95.7% in monetary terms, an increase of 1.5% from the previous year. Smartphone sales represented 75.1% of total mobile sales by units, a year-on-year increase of 5.5%.The average price of smartphones sold on the market increased 1.4% y-o-y and amounted to RUB 12,423.

LTE devices were the main driver behind smartphone sales growth. The share of LTE devices in total smartphone sales reached 66% by units sold (+23.1 p.p. y-o-y) and 88.6% in terms of value (+15.5 p.p. y-o-y). 

The main reasons for increased sales of LTE-enabled smartphones include higher demand for multimedia content, the widespread development of 4G networks and the wider choice of models available. Lower average handset prices, which have fallen by 20% y-o-y to RUB 16,576 (Q1 2016: RUB 20,645), were also a key factor.

By the end of 2016, Samsung smartphones accounted for 24.4% of total sales in Russia, an increase of 3.5 p.p. y-o-y. Apple was the second most popular brand with a share of 11.9% (+1.6 p.p. y-o-y). The fastest growing brand of smartphones in Russia, Huawei, occupied third place and quadrupled its share of sales  to 9.3% from 2.3% a year earlier. ZTE has a stable market share at 5.8%, while Lenovo's share decreased by 3.4 p.p. to 5.7%.


MTS retail: women are increasingly buying gudgets online 

“During Q1 2017, MTS reduced the size of its retail chain by 469 stores to 5,725, in line with where it was in spring last year. Simultaneously, we noticed substantial growth of the number of people purchasing products through MTS’ online store. Interestingly, this sales channel is particularly popular with women over 45 years old. This is an important trend as it shows that online stores can be popular not only amoung young people but also across more conservative customers”, -commented Kirill Dmitriev, Vice President for Sales and Services, MTS. 

MTS continues to improve the affordability of advanced and multi-functional smartphones: the price of MTS’ LTE-devices is 24% lower than the average market price. Favorable purchase terms offer MTS customers more flexibily to choose more advanced LTE-smartphones with high-quality cameras and large screens. 

MTS’ sales of LTE-enabled smartphones increased by 27.1 p.p. y-o-y to a 73.4% share of sales by volume, which is 10 p.p. higher than the market. In monetary terms, the share went up by 20.5 p.p. to 90.8%, demonstrating how MTS’ LTE sales outperfomed the market both in absolute terms and market share growth rates.

The average price of smartphones sold through the MTS retail chain increased 14.3% y-o-y during 2016. The share of MTS’ smartphone sales in the RUB <5,000 and RUB 5,000 – 10,000 categories decreased by 5.2 p.p. y-o-y and 5.7 p.p. y-o-y, respectively, in monetary terms. The share of smartphone sales in the RUB >10,000 category increased, while smartphones in the RUB >40,000 price range demonstrated the fastest share of sales gain at 6 p.p. y-o-y.   

Tags: , ,


Thursday, July 07, 2016

We have recently released a report on MTS retail network in Russia for H1 2016. 

You can download the report by the link below.

H1_2016_Retail_report.pdf (322,48 kb)


Thursday, February 20, 2014

We have issued a report on mobile retail in Russia during Q4 and Full Year 2013, based on the estimates from our mobile retail network.

Highlights from the report:

- In 2013, the number of phones sold in Russia decreased by 1.2% compared to 2012 with around 41.7 mln devices sold

- In 2013, the mobile handset market in Russia expanded by 12% in sales compared to 2012 to reach RUB 230 bln

- In 2013, the smartphone market increased by 53% compared to 2012 with 19.7 mln smartphones sold

- In 2013, the smartphone market expanded by 36% in terms of sales compared to 2012 to reach RUB 188 bln

- At the end of Q4 2013, MTS retail network comprised 4 034 stores, including 1197 franchised outlets.

Please download the complete report here

140219_Retail_Report_Q42013.pdf (1.39 mb)



Monday, August 05, 2013

We have issued a report on mobile retail in Russia during Q2 2013, based on the estimates from our mobile retail network. 

Highlights from the report:

- During Q2 2013, the number of phones sold in Russia decreased by 3.3% compared to Q2 2013 with around 8.9 mln devices sold
- During Q2 2013, the mobile handset market in Russia expanded by 17.0% in sales compared to Q2 2013 to reach RUB 49.3 bln 

- During Q2 2013, the smartphone market increased by 56.6% compared to Q2 2012 with 3.9 mln smartphones sold

- During Q2 2013, the smartphone market expanded by 50% in terms of sales compared to Q2 2012 to reach RUB 39.5 bln  

-  At the end of Q2 2013, MTS retail network comprised 4,184 stores, including 1,308 franchised outlets. 

Please download the complete report here

Mobile Retail Report Q2 2013.pdf (574.74 kb)


Russia | Mobile | Russia


Friday, May 24, 2013

Today we are issuing a report on mobile retail in Russia during Q1 2013, based on the estimates from our mobile retail network. 

Highlights from the report:
-  During Q1 2013, the number of phones sold in Russia decreased by 8.4% compared to Q1 2012 with around 8.7 mln devices sold
-  During Q1 2013, the mobile handset market in Russia expanded by 12.4% in sales compared to Q1 2012 to reach RUB 49.1 bln 

 -  The average price of mobile phones during Q1 2013 increased by 22.7% compared to Q1 2012

At the end of Q1 2013, MTS retail network comprised 4 398 stores, including 1 542 franchised outlets. 

 Please download the complete report here

Retail Report Q1 2013.pdf (465.81 kb)



Recent Tweets

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

Twitter March 19, 15:04
#MTS FY2017 Grp Rev +1.7% Grp Adj OIBDA +6.2% NProf +15.6% FCF +52.2% RUS Rev +2.9% UKR Rev +6.8% RUS OIBDA +5.7% UKR OIBDA +36.6 $MBT $MTSS

Twitter March 16, 22:16
RT @eurocomms: MTS taps majority shareholder for new CFO

Twitter March 15, 19:41
@Rudnit And on our networks they will roam!

Twitter March 14, 10:50
#Russia is the largest #cybersport market in Europe $58 mln @PayPal, @_SuperData, #e sport через @ru_rbc

Twitter March 14, 10:33
Andrei Ushatsky, CTO, speaks with @mobileeurope about #5G, #WorldCup2018, #IoT $MTSS, $MBT

Note: For Customization and Configuration, CheckOut Recent Tweets Documentation