Sistema wants MTS to go global

26 Oct 2011

According to Dow Jones, Moscow-based conglomerate AFK Sistema has announced that it wants to turn its Russian wireless unit Mobile TeleSystems (MTS) into a global telecoms player, with plans to move into a number of new markets. Sistema owner Vladimir Yevtushenkov commented: ‘We have made a decision to build MTS into a global player, and this means 200 million to 300 million subscribers and several dozen countries’. Although Yevtushenkov was not drawn on any potential acquisition targets, he did indicate that he views the conglomerate’s Indian telecoms operator Sistema Shyam TeleServices Ltd (SSTL, also known as MTS India) as an integral part of his plans; Yevtushenkov claimed that he expects the Indian cellco to sign up one million new subscribers every month.

As at end-June 2011 MTS was the largest wireless network operator by subscribers in Russia and the CIS, with operations covering all 83 Russian subjects (administrative subdivisions), both directly and via ownership of local concessionaires. In addition it has subsidiaries in Armenia, Belarus, Turkmenistan, Ukraine and Uzbekistan, which when counted alongside its domestic operations gives it a footprint covering more than 230 million people. In 2008, in a move outside of its familiar Eastern European territory, Sistema entered the Indian wireless market via SSTL (now MTS India). As at June 2011 MTS India reported 11.725 million subscribers, up from 5.138 million one year earlier. Despite strong annual gains MTS India has struggled to meet its previously-stated targets; it predicted 20 million subscribers by 2010, 35 million by 2012 and 56 million by 2014.