Russia’s Mobile TeleSystems (MTS) reported that its consolidated group revenue fell by 1.3% year-on-year in the third quarter of 2016 to RUB112.2 billion (USD1.735 billion), blaming macroeconomic factors and competition, including Russian revenue which dropped by 0.8% to RUB103.1 billion in the three-month period (accounting for 91.9% of the total sales). Quarterly group EBITDA also declined, by 5.1% year-on-year to RUB45.7 billion, including RUB43.2 billion in Russia (down 3.0% y-o-y). Group net profit for July-September 2016 stood at RUB12.6 billion, 12.8% lower than in the same period last year, impacted by a USD2.7 billion loss from the divestment of Uzbekistan cellco UMS. MTS’s total group subscriber base grew by 2.5% y-o-y to 108.8 million at 30 September 2016.
A weaker Russian economy impacted travel and therefore roaming usage, although this was partly offset by stronger data usage driven by user migration to data plans and smartphones (MTS’s Russian smartphone penetration reaching 52% in the quarter), plus a 2.8% increase in the Russian mobile subscriber base to 79.0 million (including over four million machine-to-machine [M2M] subscriptions). MTS’s 4G LTE network services now reach every region of Russia (excluding Crimea). Underlying Russian fixed network turnover rose slightly, by 0.1% to RUB15.1 billion, on continuous growth of consumer broadband and IPTV services, particularly at Moscow subsidiary MGTS.
MTS’s report highlighted that Ukrainian operations (under the MTS/Vodafone branding) saw revenues climb by 11.2% y-o-y in local currency in Q3 2016 to UAH2.9 billion (USD110 million) as mobile customers in Ukraine grew by 2.7%, driven by 3G network rollout which has now reached all major population centres around the country. Revenue in Armenia and Turkmenistan fell respectively by 21.6% and 14.5% year-on-year in the three months ending September as both countries remained exposed to macroeconomic trends which continued to weaken voice and data usage, MTS noted.