MTS is one of the largest mobile operators in Europe. What is the Russian brand especially famous for? Does the Moscow central office of MTS play a decisive role in the development of the company? A cell phone instead of a landline device - how did the managers of the mobile operator promote this principle among Russians when they conquered the market?
About company
MTS is Russia's largest mobile operator in terms of revenue. Cities where there is a national central office of MTS - Moscow, Minsk, Kyiv, Delhi, Yerevan. It is one of the "big three" of the main companies in its segment along with Beeline and Megafon. There is evidence that the company is in the top 10 global companies providing mobile services in terms of subscriber base and capitalization.
There are MTS offices in all regions of the Russian Federation, as well as in Belarus, Ukraine and Armenia. The company, in addition to the main profile, is engaged in the supply of fixed (wire) communication services, mobile Internet, cable TV. The largest shareholder is AFK Sistema (50.8%). All other shares are in free circulation. The company's securities are traded on many stock exchanges in Russia and abroad. OfficesMTS in Moscow can be found in many areas of the city.
Company History
The MTS brand (in the form of CJSC) appeared in 1993. It was created by the Russian MGTS, the German Deutsche Telecom and Siemens and several shareholders. The Germans at the time of the company's creation owned 47% of the shares, 53% - the Russians. By 1997, the AFK Sistema corporation bought out a stake owned by residents of the Russian Federation, and Deutsche Telecom acquired shares owned by Siemens. In its current legal form - MTS OJSC - the company was formed in March 2000 as a result of a merger with RTK CJSC. In the same year, the Russian brand entered the largest foreign stock exchanges. In 2005, AFK Sistema became the controlling shareholder of MTS by purchasing 10% from the German holders. The central office of MTS was in Moscow (since 1994), in 1997 branches were opened in a number of regions. The company used two main strategies in the course of expanding its activities in the constituent entities of the Russian Federation. First, these were the acquisitions of local cellular operators. Secondly, it is participation in tenders for obtaining a license to provide communication services. So the brand became known throughout Russia.
Company in the Russian mobile market
Following the results of 2013, MTS became the leader of the Russian cellular market in terms of revenue, having earned 355 billion rubles (MegaFon - 293, Beeline - 290). The company was also able to outperform its competitors in terms of the number of subscribers in the fixed-line segment. The company's net profit in 2013 amounted to 80 billion rubles. This is more than, in particular, MegaFon, which, at the same time, outstripped MTS in terms ofprofitability (44.6%). The number of mobile subscribers of Mobile Telesystems in 2013 amounted to 107.8 million people.
MTS took second place after MegaFon in terms of revenue from providing mobile Internet access, but outperformed its competitors in terms of the number of users of this service. Compared to 2012, MTS increased the so-called average revenue per subscriber to 315 rubles, while a year earlier this figure was 297 rubles. The average duration of voice calls in 2013 (Q4) was the highest for MTS - 345 minutes. While competitors did not exceed 300.
Activity Segments
MTS focuses its activities not only on the provision of cellular services. In 2009, the company bought a controlling stake in COMSTAR, a company providing fixed-line communication services. In 2010, the two corporations merged. MTS, having acquired the status of the legal successor of the former COMSTAR, received a controlling stake in OJSC MGTS. As a result, "Mobile Telesystems" became the operator of almost all types of communication existing in Russia. The company has become a comprehensive telecommunications provider.
In subsequent years, MTS began to strengthen its position in the fixed-line segments: in 2011, the corporation increased its stake in MGTS shares to 94.1%, having bought the Sistema-Invenchur structure from AFK Sistema, from which was 29% of the shares of the Moscow city telephone network.
Activities in Belarus
The company has a wide range of activities in Belarus. At the beginning of 2014, the number of subscribers of this mobile operator in the country exceeded 5.39 million, of which 1.7 million are Internet users. MTS coverage is 98.4% of the entire territory of the state. The central office of MTS in Belarus is located in Minsk.
The operator's work is provided by about 6700 stations. The speed of mobile Internet from "Mobile Telesystems" in Belarus, thanks to the technologies used, can reach 42 megabits / sec. The Russian mobile operator has been present in the neighboring country since 2001. Then the Moscow office of MTS won the state tender for licensed customer service. True, the Russian company does not own a controlling stake in its subsidiary in Belarus (only 49%).
Activities in Ukraine
MTS brand is also known in Ukraine. The service of subscribers in this country under the Mobile Telesystems brand is carried out by UMC. The central office of MTS in Ukraine is located in Kyiv. In 2003, MTS, being the largest mobile operator in Eastern Europe, bought a controlling stake in UMC (initially 57.7%, and in the same year, thanks to several acquisitions, this figure increased to 100%). The local operator "JEANS" appears with the lowest tariffs on the market.
Great attention is paid to the development of technology. At the end of 2003, the Ukrainian "daughter" of MTS launches Internet access based on GPRS, services related todistribution of mobile content. In 2004, UMC provides full coverage of the Kyiv metro (including tunnels from one station to another). At the end of 2004, the number of cellular subscribers in Ukraine begins to exceed the number of those citizens who use fixed phones. The market leader at that time was UMC. Over the years, this company, 100% owned by MTS, has received several honorary business awards. For example, in 2005 she became the best employer in Ukraine (according to the magazine "Business").
Activities in India
MTS Company operates in foreign markets. The Russian brand is very actively developing the Indian market. In December 2008, AFK Sistema, which owns a controlling stake in the operator, and the Shyam group of companies registered a joint company - Sistema Shyam Teleservices. The central office of MTS in India is located in Delhi. The Russian company thus gained access to the market of a country whose population exceeds 1.17 billion people. AFK Sistema plans to get 100% of the shares of joint ventures.
True, this initiative, according to the Russian business press, does not find understanding among minority shareholders, as a result of which the court imposed a ban on transactions within the Russian-Indian company. Representatives of the joint venture undertook to comply with the instructions of the court. Until permission from the Indian authorities to conduct the transaction is obtained, the share of the Russian AFK Sistema and the Federal Property Management Agency, which owns 73.95% of Sistema Shyam Teleservices, will notmay be increased.
MTS in St. Petersburg
An interesting story of MTS appearance on the St. Petersburg market. By the time the Moscow operator arrived (early 2001), MegaFon was playing the first violin here. According to experts, MTS did not have objective conditions to move the leader of the St. Petersburg market. Then the Moscow managers decided to make some original moves. First, the company quickly launched several dozen base stations. Secondly, Muscovites reduced the cost of calls within the network to the limit - up to 1 cent per minute (however, the action lasted only until the end of 2002). As analysts noted, a real boom in reconnections from MegaFon to a new operator began. Substations of several other large cities in the North-West of Russia were connected to the MTS switch located in St. Petersburg. The central office of the St. Petersburg branch of the operator began to serve neighboring regions, each of which had tariff rules for the home network. The number of subscribers grew exponentially. If in May 2002 in St. Petersburg and the Leningrad region there were 320 citizens who connected to MTS, then by the beginning of 2003 - more than 800 thousand, by the middle of this year their number exceeded 1 million, and by the middle of 2005 in St. Petersburg there were more than 2 million subscribers of this operator.
Fame of MTS in the world
The brand has been included in the list of 100 biggest brands in the world (“BRANDZ rating”) by Millward Brown Optimor (an international marketing research agency) for 7 times. The brand price as of 2014 is about 12.18 billion dollars. For the first time in the ratings of this organizationMTS hit in 2008 (with a brand value of $8.1 billion). No other Russian operator is represented in them. This firm is ranked 9th in the ranking of the most valuable telecommunications brands (also according to Millward research). In addition to MTS, Sberbank is one of the Russian private companies in the BRANDZ rating.
The brand price, according to the Millward methodology, is formed based on the projected revenue of the company, which its name can generate. The position of the company in the market, the opinion of subscribers are also important. Millward experts study more than 50,000 companies around the world and conduct a survey of more than 1 million respondents. Therefore, not only the colorful central office of MTS, whose address is known to many Muscovites, determines the face of the company, but also the opinion of those using the services of this operator.
