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.

3G network in Moscow, as of January 15, 2010.

At the end of December 2009, we launched our commercial 3G network in Moscow, complementing our existing coverage in the Moscow region and throughout Russia. At the time of launch, our network consisted of 197 base stations, which allowed us to offer extensive coverage within the MKAD (the so-called beltway, or highway, that surrounds Moscow) to a population of over 10 million.  By the end of January, we will have installed up to 300 base stations to serve Russia's capital.  For the latest network map, click here.

We estimate that data traffic has already increased 2-3 times in areas where both 2G and 3G networks are available, compared to the traffic prior to the launch of 3G. Currently, we have a variety of special tariffs for 3G users, including unlimited ones.

This week we announced a joint project with the Moscow United Energy Company (MOEK) to deploy an Automatic Control and Production Management System in a Moscow neighborhood Chertanovo. It is expected that the project will expand to all other properties served by MOEK, the largest provider of thermal energy in Moscow, that delivers water and heating to around 70% of residential and commercial properties in the city.

Under the current project, MTS will install SIM-cards into energy and water meters, enabling MOEK to collect data from their properties and receive real-time updates on usage trends. Wireless transmission of metering data will significantly increase the efficiency of energy planning and allow savings of up to 10% on energy consumption (according to experts quoted in the Energorynok magazine). While already popular in Western Europe and the US, smart metering is just taking off in Russia, and the new monitoring project we are launching with MOEK will be the largest in Moscow.

We believe that machine-to-machine communications will be an important part of our industry’s future, and MTS has already launched several projects in this area. For instance, we are working with DHL to track deliveries and provide instant updates about the location of couriers. We are also working with the Moscow Metro and the Zelenograd Bus Depot (Zelenogradskiy Avtokombinat), where in-built SIM-cards are used to monitor locations of trains and buses to increase efficiency of their movement from the control center.

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.

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.