Mobile TeleSystems (MTS), Russia’s largest mobile operator by subscribers, may seek additional funding this year, as it looks to expand in its domestic market and also Ukraine, chief financial officer Alexey Kornya said in an interview with Bloomberg. The company, which has around USD1 billion in cash at its disposal, expects to borrow up to USD500 million by the end of 2015, and may tap debt markets as soon as this quarter, Kornya disclosed. MTS, which is not directly targeted by international financial restrictions imposed on Russia linked to the Ukraine conflict, still has access to overseas credit markets and may borrow in US dollars (USD) and Russian rubles (RUB), he said.
In February this year MTS agreed to pay USD116 million for a 3G licence in Ukraine, which the company plans to deploy over the course of the next three years, Kornya noted. Meanwhile, in terms of its domestic market, the CFO told Bloomberg: ‘Russia is still a very attractive market. It is still undervalued and that reflects a lack of understanding of Russia by investors … There is no silver bullet in the mobile telecom market, but a lot will depend on how affordable smartphones are. It is way more challenging for customers to buy a smartphone after the ruble devaluation.’