MTS buys regional operator Green Dot; pumps RUB2bn into Moscow Region development

6 Feb 2020

Russia’s Mobile TeleSystems (MTS) announced yesterday (5 February) that it has acquired a 51% controlling stake in Zelenaya Tochka (Green Dot) Group, a provider of fixed broadband and digital TV for homes and businesses in 18 Russian cities. Under the terms of the agreement, MTS retains a three-year call option to purchase the remaining 49% of Green Dot’s share capital, it disclosed on its investor website.

The Zelenaya Tochka group of companies comprises 13 connectivity operators operating under multiple brands. MTS’ announcement lists a Green Dot footprint in twelve cities, namely: Stavropol, Mikhaylovsk, Nevinnomyssk, Elista, Tambov, Belgorod, Lipetsk, Ufa, Neftekamsk, Beloretsk, Tomsk and Vladivostok. However, Green Dot’s websites show a presence in a total of 18 cities across eleven Russian regions, including the following additional cities: Moscow, Efremov, Nalchik, Kochubeyevskoe, Gryazi and Elets. The internet/TV operator also offers IP telephony in certain cities, including Moscow.

MTS did not disclose the value of the transaction, although analysts cited by TelecomDaily claimed that the amount was unlikely to exceed RUB1 billion (USD16 million), noting that Green Dot had ceased expanding and was struggling to compete with larger fixed network players such as Rostelecom and ER-Telecom.

MTS’ First Vice President for Telecommunications Inessa Galaktionova commented on the deal: ‘The fixed line connectivity services that MTS offers in over 200 Russian cities are an important pillar of our growing user ecosystem, as well as a strong foundation to build on as we expand in convergence and comprehensive smart home and entertainment solutions. Acquiring assets to expand our regional footprint is complementary to our new growth strategy and, most importantly, promises to enhance access to high-quality MTS digital services for customers.’

This week MTS also launched a four-year RUB2 billion GPON fibre access/backbone network development programme for the Moscow Oblast (Region), encompassing 36 towns/cities/municipalities. The expanded/upgraded fibre transport network is also intended to support the development of 5G wireless and Smart City services. In 2020 GPON deployments will take place in nine Moscow Oblast cities: Podolsk, Sergiev-Posad, Domodedovo, Orekhovo-Zuevo, Serpukhov, Dmitrov, Schelkovo, Ivanteevka and Solnechnogorsk. Construction is planned in 20 cities in 2021-22, with seven more to follow in 2023. Taking into account its existing GPON footprint, the total number of Moscow Oblast cities with MTS GPON access will reach 54, corresponding to 75% of the region’s cities.

Russia, Green Dot (Russia), Mobile TeleSystems (MTS)