MegaFon’s annual mobile service revenue falls for the first time

17 Mar 2017

Russian mobile operator MegaFon has announced its results for Q4 and full-year 2016. Fourth-quarter consolidated revenue decreased by 0.8% year-on-year to RUB81.287 billion (USD1.397 billion) including mobile data services revenue which increased by 1.9% y-o-y to RUB21.372 billion. 4Q16 adjusted EBITDA fell by 1.6% to RUB29.053 billion, and quarterly net profit was RUB3.079 billion, 42.3% lower than the year-ago quarter, affected by a one-off write-down in its investments in fixed network operating subsidiary NetByNet. MegaFon’s consolidated mobile subscriber base stood at 77.4 million at 31 December 2016, up by 0.8% y-o-y, including its subsidiaries in Tajikistan and the breakaway Georgian regions of Abkhazia and South Ossetia. Its Russian mobile subscribers reached 75.6 million (including M2M SIMs) at end-2016, up 1% y-o-y as it continues to compete closely for the top market position with Mobile TeleSystems (MTS) in terms of user volumes.

Annual consolidated group revenue increased by 0.9% to RUB316.275 billion (including RUB84.441 billion mobile data revenue – up 5.7%), but notably, total annual mobile services revenue fell for the first time, by 2.4% to RUB263.6 billion, driven by factors including tougher competition and stagnation of voice turnover, whilst it was also noted that the rate of increase in mobile data turnover had slowed (although now amounting to 26.7% of consolidated sales, up by 1.2 percentage points on the previous year). Meanwhile, annual turnover from equipment sales jumped 35.5% to RUB27.0 billion, and fixed line services turnover rose 9.5% to RUB25.7 billion. Consolidated twelve-month adjusted EBITDA dropped 8.5% to RUB121.139 billion, and net profit for FY 2016 decreased by 34.7% to RUB25.496 billion. Yearly CAPEX investment reached RUB65.577 billion (20.7% of turnover), 6.5% lower than in 2015.

Russia, MegaFon