Russian Mobile Network Seeking 5% of Profits from Financial Services by 2017
Published on: 21st Apr 2013
By: Ian Mansfield
The Russian mobile network operator MTS is aiming to generate at least 5 percent of its net profits from financial services by late 2017 the company's CEO Andrei Dubovskov told an investor conference.
The company recently bought a 25.1% stake in the local banking group, MTS Bank for US$160 million.
MTS now owns just under 27% of the bank, which is majority owned by Sistema, which in turn is also the majority shareholder in the mobile network.
The company did not explain the rationale for the deal when it was announced last month.
MTS and MTS Bank have also concluded a profit-sharing agreement whereby MTS and MTS Bank would realize 70% and 30% of the proceeds from the MTS Dengi (MTS Money) project respectively.
The MTS Dengi project is aimed at providing customers throughout Russia with payment tools, including credit cards, near-field communications-enabled SIM cards and PoS (point-of-sale) credit.
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