MTS replaces head

18 Apr 2006

The head of Russian mobile market leader Mobile TeleSystems (MTS), Vassily Sidorov, resigned last Thursday after serving as President since October 2003. MTS immediately appointed a replacement, Leonid Melamed, previously the head of insurance firm Rosno, which is owned by MTS’ parent Sistema. Melamed has no experience in the telecom industry and has never worked in a public company. According to Sistema chairman Vladimir Yevtushenkov, Melamed’s main task is to turn MTS into ‘a real global company with a market capitalisation of well over USD20 billion.’ The company’s current capitalization based on share price is around USD13.5 billion. Talk of Sidorov being forced out had spread since late last year following disappointing third quarter results, a disastrous takeover bid for Kyrgyzstan cellco Bitel and loss of market share in key regions of Russia and Ukraine. MTS’ shares have underperformed those of nearest rival Vimpelcom, losing 8% in the last six months whilst Vimpelcom gained around 13%.

Russia, Mobile TeleSystems (MTS)