MTS Announces Strong Russian Growth

Russia's MTS has reported its results for the fourth quarter 2001 and the year ended 31st December 2001. The company showed a substantial growth in main financial and operational indicators. As of today, the number of MTS subscribers exceeds 3.58 million. The company's regional subscribers amount to 1.48 million, including subscribers of Kuban-GSM - the largest Russian regional operator, the acquisition of which MTS also announced.

MTS says that net revenue in 2001 increased by 67% to $893 million, from US$536 million the previous year. EBITDA was US$424 million for 2001, an increase of 80% compared with the previous year. ARPU averaged US$36 over the year.

MTS' capital expenditures were US$396.7 million in 2001 which is an increase of 103% compared to US$195 million invested during 2000. Cumulative network investments amounted to US$881 million. During 2001, 1,002 new base stations were added to the MTS network, while current base stations were expanded. The number of base stations reached 2,125 in Russia, including 1,144 in the Moscow licence area.

Churn rate for the year 2001 was 26.8% which is somewhat higher than 21.6% in 2000. This has resulted from a strict active subscriber accounting policy, high inflow of seasonal subscribers using the mobile phone for the summer season in May through October, (accordingly counted as churn subscribers in the period of November to January) and general increase of migrating subscribers.

On the acquisition of Kuban-GSM, MTS acquired the shares from existing shareholders of Kuban GSM, including OJSC STC, individual shareholders and, LLC KubTelecom, which continues to own 49% of the outstanding shares of Kuban GSM.'"

Posted to the site on 11th April 2002