IR Blog

Today we announced our plans to offer Comstar’s products and services under the MTS brand by the end of 2011. After the rebranding is completed, MTS will offer a full range of fixed and mobile communication products under the MTS brand throughout Russia, expanding the presence of our brand and leveraging its strength to sell additional products. We will keep the MGTS brand for fixed telephony in Moscow, as it is one of oldest brands in Russia with roots in the 19th century.

The MTS brand has been recognized as the most powerful and valuable brand in Russia for the last three years by the annual BrandZ ranking published by the Financial Times and Millward Brown. Given the popularity of the MTS brand in its markets of operation, where the Company is renowned for its quality of services and its ability to introduce new innovative products and services, it is logical that we have decided to use the MTS brand for our combined services portfolio.

MTS is pleased to announce that we launched the first MTS Comstar bundle offer – the STREAM Versatile Box product – through our retail stores in Moscow and Zelenograd, a Moscow suburb, in December 2009. This is one of the first steps of our previously announced Comstar integration plans following our acquisition of the company in October 2009.

On Thursday, November 19, 2009, Dr. Michael Hecker gave an interview on Sky News. In the clip below, Dr. Hecker shares his thoughts on the current trends in the telecommunications industry including our recent acquisition of a controlling stake of Comstar-UTS by MTS.

Please watch below the video presenting our 3i strategy. We have shot this video over the last few months across various locations of MTS, including our retail stores, call centers and technical facilities. The video also includes interviews with the management of MTS: Mikhail Shamolin, President and CEO of the Company; Michael Hecker, Vice President for Strategy and Corporate Development; and Mikhail Gerchuk, Vice President and Chief Commercial Officer.



Below we have also posted a longer version of the video that includes in-depth interviews and more details about some of our recent initiatives, including the launch of Omlet.ru content portal.

On November 13, we disclosed our financial results for the third quarter 2009. As always, we posted a wealth of information about the results on our website – the press release, the presentation and the Excel spreadsheet with summary financial information for 2004-2009. 

As was stated during the conference call, we had a good quarter with revenues for the Group growing 12% q-on-q to nearly $2.3 billion on the back of healthy subscriber additions, a seasonal increase in usage, rising data consumption and a growing contribution from our retail sales. The Group’s OIBDA increased 11% q-on-q to $1.1 billion with an overall margin of 46.9%. Less the effect of our retail investments, the margin improved from Q2 2009 to 50.7%.

Though we continue to see an impact from macroeconomic uncertainty, we realized growth q-on-q in our Russian operations of 10% to 56 billion rubles. In addition to the seasonal dynamics of our business, we are succeeding in driving our active subscriber base and realizing 50% year-over-year growth in both data content and traffic revenues. We also witnessed a greater contribution from handset sales, which exceeded 3.2 billion rubles or 5.7% of revenue.

Global Telecom Business, a leading telecommunications trade magazine, recently interviewed Mikhail Shamolin, President and CEO of MTS. The interview is now available on GTB’s website, where Shamolin discusses the acquisition of Comstar and MTS’ plans for delivering content to subscribers.

By Joshua Tulgan, Director of Investor Relations at MTS (NYSE:MBT)

Recently, we tracked a discussion about the role of IR in the M&A process on a couple of industry blogs (original entry and the response to it). Given the recent announcement of our intent to acquire a controlling stake of COMSTAR-UTS, I thought I could offer one perspective from an IR professional.

I would agree that investment banks are a great resource for information for M&A communications (i.e. the data points used to sell the deal, such as multiples and comparisons with other similar transactions, particularly in a global context). At the same time, I do believe that the IR department should be brought in to discuss such key questions as the strategic justification, valuation process, and key integration issues inherent in any M&A deal.