MegaFon Q1 revenues increase 18% y-o-y; subscriber base witnesses ‘seasonal decline’

18 May 2011

MegaFon, Russia’s second largest cellular operator by subscribers, has reported consolidated revenues of RUB55.16 billion (USD1.96 billion) for the three months ending 31 March 2011; this figure represents an increase of 18% from the RUB46.74 billion generated in 1Q10. Operating income before depreciation and amortisation (OIBDA) grew 11.1% to RUB23.8 billion in the first quarter, whilst net income slumped 1.9% to RUB10.1 billion. Capital expenditure (CAPEX) for 1Q11 was RUB13.07 billion, more than triple the figure stated a year earlier. In operational terms MegaFon’s domestic subscriber base increased 9.3% year-on-year to 56.46 million, albeit decreasing 0.3% quarter-on-quarter on account of a ‘seasonal decline in subscriber activity’. Although a precise operational breakdown has not been provided, MegaFon reports that its consolidated subscriber base dropped 0.3% to 57.1 million in 1Q11. MegaFon’s subsidiaries include TT Mobile in Tajikistan, Aquafon in the Republic of Abkhazia and Ostelecom in the Republic of South Ossetia.

Sergey Soldatenkov, CEO of MegaFon commented: ‘The first quarter results have shown that MegaFon is holding on to the positive trends of last year; revenues from data transfer services continue to show stable growth. To a large extent this was possible due to the ongoing modernisation of the old networks and development of the new ones. The maximum capacity of Russian segment of the European transportation network is now 500Gbps and the maximum capacity of the foreign segment is 40Gbps. The quarterly results confirm that the company has chosen the right strategy by focusing on data transfer services’.

Russia, MegaFon