Russian cellco MegaFon’s total group revenue increased by 14.8% year-on-year to RUB86.254 billion (USD1.529 billion) in Q1 2017, although if excluding recent acquisitions such as its new online digital services asset Mail.ru Group, pro-forma total revenue increased at a slower rate of 1.4% whilst telecoms segment revenue decreased by 0.9% y-o-y to RUB74.494 billion. MegaFon operates in Russia, Tajikistan, and the Republics of Abkhazia and South Ossetia (both breakaway Georgian states), but it reported that revenue from Russia remained the major component, accounting for 98.6% of total revenue in the three months to 31 March 2017.
Wireless service revenue decreased in Q1 2017 by 2.9% y-o-y to RUB62.714 billion, due to declining voice revenue (mainly due to price reductions of bundles) to meet continued competitive pressure. Mobile data revenue increased by 1.4% y-o-y to RUB20.941 billion in 1Q17, whilst fixed network service revenue grew by 1.2% y-o-y to RUB6.077 billion in the same period. Group CAPEX in the telecom segment in Q1 2017 was 43.0% lower than in Q1 2016, amounting to RUB8.147 billion (affected by frequency acquisitions in the year-ago period). Quarterly telecoms segment EBITDA decreased by 4.0% y-o-y to RUB29.031 billion.
The group’s number of mobile subscribers as of 31 March 2017 grew by 1.2% y-o-y to 77.3 million, including Russian subscribers which increased by 1.4% to 75.6 million. MegaFon’s reported ‘mobile data service user’ base in Russia increased by 5.1% y-o-y to 31.1 million, whilst 58.5% of all devices registered on the MegaFon network were ‘data-enabled devices’ by end-March.