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Mobile TeleSystems (MTS) — largest mobile phone operator in Russia and the CIS.
The company was founded in 1993 and is headquartered in Moscow, Russia.
Considering its subsidiaries, the Company services over 96 million subscribers. The regions of Russia, as well as Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan, in which MTS and its associates and subsidiaries are licensed to provide GSM services, have a total population of more than 230 million.
According to Informa Telecoms & Media's World Cellular Information Service, MTS ranks as the 8th largest operator in the world by proportionate subscriptions at the end of 2007.
Since June 2000, MTS’ Level 3 ADRs have been listed on the New York Stock Exchange (ticker symbol MBT).
MTS is 52,8% majority-owned by Sistema, a Russian conglomerate controlled by billionaire Vladimir Yevtushenkov. (Sistema also owns fixed-line operator Comstar-UTS, tourist company Intourist and Detsky Mir, , a nationwide chain of department stores specializing in products for children).
Structure of the Company
Mobile TeleSystems has reported that in 2008 its consolidated revenues rose 24.2% year-on-year (y/y), to $10,245 billion, on the back of the addition of 9,79 million subscribers (taking its total subscriber base to 95,66 million), as well as increased voice and data usage. However, net income dropped 6,8% on the year, to $1,930 billion, primarily because of the depreciations of both the Russian rouble and the Ukrainian hryvnia against the U.S. dollar, in the fourth quarter of 2008. This has had a particularly strong impact as MTS earns its revenues in the currencies of the countries of operation, while 69% of its $4,1-billion debt is in U.S. dollars (with 20% in Russian roubles and 11% in euro).
MTS's annual operating income before depreciation and amortisation (OIBDA) was up 21,7% y/y to $5,14 billion, and the OIBDA margin was 50,2%. Capital expenditure was $2,227 billion in 2007, up from $1,54 billion the previous year but around $300 million less than had been projected, as the group was able to renegotiate and defer certain payments. In 2009 MTS expects CAPEX to drop to around $1,5 billion, including maintenance investments of around $350 million, strategic investments in 3G/EDGE infrastructure and proprietary transport networks of $450 million, and around $700 million carried over from 2008.
Source: MTS, RusTele.com
MTS reported 64,63 million subscribers in Russia at the end of 2008, with its market share dropping from 35% to 34%, while it maintained a 33% market share in Ukraine, although subscriber numbers dropped to 18,12 million at end-2008, from 20,0 million the previous year. Monthly ARPU in Russia was $9,5 in the fourth quarter of 2008, down from $11,5 the previous quarter and $10,0 the previous year. However, this can be attributed to the dilutive effect of healthy fourth-quarter subscriber uptake. MTS also made steady subscriber gains in its smaller markets of Uzbekistan, Turkmenistan, Armenia, and Belarus, although typically to the detriment of ARPU, which, as expected, has decreased as subscriber numbers and penetration levels have risen.
In 2008 May MTS has announced that it has commercially launched network UMTS / HSPA 3G in St Petersburg. The three tariff plans available offer 100 MB of prepaid traffic for 190 roubles ($8,0), 500 MB for 1,000 roubles, and 1 GB for 1,500 roubles, according to the company's Head of North-Western Operations, Ivan Zolochevsky.
MTS aims to further its 3G roll-out on 2 June with the launch of services in Kazan, where it claims that its network is technically prepared for commercial launch, as are its Sochi and Yekaterinburg networks. It is targeting the launch of networks in 10 cities by the end of 2008 and up to 40 cities in 2009. Its investments in 3G will total around $1,6 billion by 2011.
In October 2008 Vodafone announced that it has struck a strategic, non-equity partnership with MTS, giving the Russian operator access to products, services and devices from Vodafone.
MTS will also draw on Vodafone’s know how for building and developing 3G networks and mobile broadband products, as it rolls out its own HSDPA networks.
In 2009 February MTS has bought mobile retailer Telefon.Ru for $60 mln. The chain operates 512 stores in 160 Russian cities, selling airtime contracts, handsets and other consumer electronics.
The $60 mln. price tag includes $25 mln. for inventory reserves and will be supplemented by a further $25 mln. in 12 to 18 months should the chain meet performance criteria.
In 2009 March Mobile TeleSystems announced that it has increased its stake in Dagtelecom LLC up to 100% from 74,99% by acquiring a 25,01% stake from Glaxen for $41,56 mln. MBT also acquired a Cyprus-based company, Narico Holdings Limited, for $60 million.
In 2009 April MTS has acquired a 100% stake in the Eldorado mobile phone retail chain for $22,85 million of which $5 million will be paid after 12 months should the retail chain satisfy certain performance criteria. Eldorado operates about 380 stores.
In 2009 April Sistema Shyam TeleService Ltd, which has licence to offer mobile telephony services in 22 circles in India, has launched its first greenfield service in Tamil Nadu, under the brand ‘MTS’.
In 2009 April K-Telecom company (VivaCell-MTS brand) has launched UMTS / HSPA 3G network in Armenia in the three largest cities of the country: Yerevan, the capital of Armenia, Guymri and Vanadzor. Huawei Technologies Co. Ltd. was selected as supplier of equipment for building of 3G mobile network in Armenia.
Mobile Telesystems holds 80% of the shares of VivaCell with the remaining 20% owned by Lebanese investment Fattouch Group. Number of VivaCell-MTS’s subscribers had totalled 2,05 mln by the end of February 2009.
CEO: Mikhail V. Shamolin
4, Marksistskaya Street
Tel: +7 495 223 2025