Mobile TeleSystems (MTS) has posted revenue of RUB97.6 billion (USD2.8 billion) for the first quarter of 2014, up 5.1% year-on-year. The gain is in part due to growth of more than 7% in Russian mobile service revenue to RUB68 billion, which in turn comes on the back of a 42% hike in data traffic following increased adoption of data plans; smartphone penetration among active subscribers has now reached 35%. Meanwhile, MTS’s Russian fixed telephony unit fared less well, with sales slipping 1.8% y-o-y to just over RUB15 billion. The company ascribed the decline to ‘falling numbers of traditional, fixed line telephony services’ failing to offset ‘steady growth in Moscow-based GPON additions and the migration of older ADSL customers’. Despite volatile operating conditions, revenue in Ukraine grew 1.4% compared to the same period a year ago, but in Armenia sales slipped 3%.
Net income attributable to the group inched upwards by 0.5% y-o-y to RUB13 billion. The company left its full year guidance unchanged, but it did not rule out a revision later in 2014 due to economic volatility and currency depreciation in Russia and Ukraine. Andrei Duboskov, president and CEO of MTS, stated: ‘Naturally we must acknowledge the macroeconomic issues that we face. Since last year, estimates of GDP performance in our core markets have moved downward, and we witnessed currency volatility in Russia and Ukraine. This may impact our performance, but for now, we continue to see steady, profitable growth throughout our markets of operation.’
At 31 March 2014, MTS claimed 108.7 million mobile subscribers, of which 70% were located in Russia, 21% in Ukraine, with the remaining 9% spread across Turkmenistan, Armenia and Belarus.