MTS is one of the largest mobile operators in Europe. What is the Russian brand particularly 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 stationary device - how did the managers of a mobile operator propagandize this market among Russians?
About company
MTS is the largest mobile operator in Russia in terms of revenue. Cities where there is a national central office of MTS - Moscow, Minsk, Kiev, Delhi, Yerevan. Included in 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.
MTS offices are 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 (wired) 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. MTS offices in Moscow can be found in many areas of the city.
history of the company
The MTS brand (in the form of a closed joint-stock company) appeared in 1993. It was created by the Russian MGTS, German Deutsche Telecom and Siemens and several shareholders. The Germans at the time of the creation of the company owned a 47% stake in shares, 53% - to Russians. By 1997, 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 holder of a controlling stake in MTS, acquiring 10% from German holders. The central office of MTS has been in Moscow (since 1994), in 1997 branches were opened in a number of regions. The company used two main strategies during the deployment of its activities in the constituent entities of the Russian Federation. Firstly, it was the acquisition of local mobile operators. Secondly, this is participation in tenders for a license to provide communication services. So the brand became known throughout Russia.
Company in the Russian cellular market
According to the results of 2013, MTS became the leader in the Russian cellular communications market in revenue, earning 355 billion rubles (from MegaFon - 293, from Beeline - 290). The company was also able to get ahead of competitors in 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, that of Megafon, which, at the same time, was ahead of MTS in terms of profitability (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 revenue from the provision of mobile Internet access, but it outperformed its competitors in 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 largest for MTS - 345 minutes. While competitors did not exceed 300.
Business segments
MTS focuses activities not only on the provision of cellular services. In 2009, the company bought a controlling stake in COMSTAR, a fixed-line telecommunications company. In 2010, the merger of the two corporations. MTS, having acquired the successor status of the former COMSTAR, received a controlling stake in MGTS OJSC. As a result, Mobile TeleSystems became the operator of almost all types of communications existing in Russia. The company has become a comprehensive telecommunications provider.
In the following years, MTS began to strengthen its position in the fixed-line telephony segments: in 2011, the corporation increased its stake in MGTS shares to 94.1% by buying from Sistema-Inventure, which had a 29% stake in 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 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, due to the applied technologies, can reach 42 megabits / sec. A Russian mobile operator has been present in a neighboring country since 2001. Then the Moscow office of MTS won a 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
The MTS brand is also known in Ukraine. The service of subscribers in this country under the brand name "Mobile Telesystems" is carried out by UMC. The central office of MTS in Ukraine is located in Kiev. In 2003, MTS, being the largest mobile operator in Eastern Europe, bought a controlling stake in UMC (first 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.
Much attention is paid to the development of technology. At the end of 2003, the Ukrainian “daughter” MTS launched GPRS-based Internet access, and services related to the distribution of mobile content were developed. In 2004, UMC provides full coverage of the Kiev metro (including tunnels from one station to another). At the end of 2004, the number of cellular subscribers in Ukraine began to exceed the number of those citizens who use landline phones. The market leader at that time was UMC. Over the years, this company, 100% owned by MTS, has won several honorary awards in the field of business. For example, in 2005 she became the best employer in Ukraine (according to the version of Delovoy magazine).
Activities in India
MTS company operates in foreign markets. A very active Russian brand is 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. MTS headquarters in India is located in Delhi. Thus, the Russian company gained access to the market of the country, whose population exceeds 1.17 billion people. AFK Sistema plans to get 100% of the shares in the joint venture.
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 framework of the Russian-Indian company. Representatives of the joint venture undertook to comply with the requirements of the court. Until the permission of the Indian authorities to conduct the transaction is obtained, the share of Russian AFK Sistema and the Federal Property Management Agency, which owns 73.95% of Sistema Shyam Teleservices, cannot be increased.
MTS in St. Petersburg
An interesting story is the emergence of MTS in the market of St. Petersburg. By the time the Moscow cameraman arrived (early 2001), Megafon was playing the first violin here. According to experts, MTS did not have objective conditions for moving the leader of the St. Petersburg market. Then the Moscow managers decided to make some original moves. Firstly, the company quickly launched dozens of base stations. Secondly, Muscovites made calls within the network extremely cheap - up to 1 cent per minute (though the action lasted only until the end of 2002). The analysts noted that the real boom of reconnections from Megafon to the 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 operator’s SPb branch began to serve neighboring regions, in each of which tariff rules for the home network were in effect. The number of subscribers has grown in progression. If in May 2002 in St. Petersburg and the Leningrad region there were 320 citizens who connected to the 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 it had become more than 2 million subscribers of this operator.
MTS fame in the world
The brand has been included in the list of 100 largest brands in the world 7 times (“BRANDZ rating”) according to Millward Brown Optimor (international marketing research agency). The price of the brand as of 2014 is about $ 12.18 billion. For the first time, MTS entered the ratings of this organization in 2008 (with a brand value of $ 8.1 billion). No other Russian operator is represented in them. This company ranks 9th in the ranking of the most expensive telecommunication brands (also according to Millward research). In addition to MTS, among Russian private companies in the ranking of BRANDZ there is Sberbank.
The brand price, according to the Millward methodology, is formed based on the projected revenue of the company, which its name can generate. Also important are the company's position in the market, the opinion of subscribers. Millward experts study more than 50 thousand 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.