Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

MTS Hits $394M Net in Q4, Sees Slower Growth

The operator still plans on spending up to 22 percent of revenue on capex. Vladimir Filonov

MTS, the country’s biggest mobile phone operator, expects a sluggish economic outlook to hold back revenue growth in 2012 after it comfortably beat market expectations with a big jump in fourth-quarter net profit.

The operator, which is part of oil-to-telecoms conglomerate Sistema, said Monday that revenue growth was likely to be 5 percent to 7 percent this year, below the 9.1 percent recorded in 2011.

"We understand that in 2012 growth will be limited due to macroeconomic reasons. The growth we have shown in previous periods is unlikely to be characteristic of the telecommunications business in the future," president Andrei Dubovskov said.

"We will continue to develop new [business] segments, including financial services, and we will continue to develop our existing client base through sales of smartphones and converged services," he added.

MTS's net income rose more than 150 percent to $393.5 million in the fourth quarter of last year, significantly ahead of the $358.2 million forecast by analysts in a Reuters poll.

Analysts cited a write-off of some $140 million relating to the suspension of operations in Turkmenistan in the equivalent quarter of 2010 as one reason behind the sharp jump in profit.

"The figures are quite good, with net income 10 percent above consensus, but attention is likely to focus on the company's guidance," VTB analyst Viktor Klimovich said.

"The revenue growth forecast of 5 percent to 7 percent is cautious but realistic — [Russia] still has quite slow growth in personal incomes. We think the major driver of revenue growth will still be mobile data services," he added.

MTS leads rivals MegaFon and VimpelCom in the Russian market with nearly 70 million subscribers as of the end of December.

The firm said fourth-quarter operating income before depreciation and amortization rose 10 percent to $1.28 billion, ahead of $1.25 billion forecast in the poll.

Sales fell slightly to $2.98 billion, missing analysts' expectations of $3.03 billion.

The group said it would spend 20 percent to 22 percent of its revenue on capex in 2012, in line with the 21 percent spent last year.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

paiment methods
Not ready to support today?
Remind me later.

Read more