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Business news, 08.04.2008 22:57

MTS invests 10 bn rubles into 3G network in St. Petersburg

MTS hopes to increase its earnings from non-voice services in 2008. The operator intends to achieve the goal through launching 3G networks above all. Regarding the shortage of free frequencies in Moscow, MTS plans to develop 3G in St. Petersburg. The company’s top management intends to invest 10 bn rubles into 3G infrastructure development in the North-West by 2010.

The mobile communication operators whose penetration level has long ago gone beyond 100% are looking for new growth points. 3G networks development seems to be the most evident opportunity. Meanwhile, the ‘big three’ operators speak about the strategic importance of launching their own 3G networks during 2008. MTS hopes to increase earnings from non-voice services launching 3G.

According to Ivan Zolochevsky, director of MTS North-West subsidiary, the company’s subscriber base has grown by 4.92% in St. Petersburg. ARPU has increased by 19.5%. ‘MTS ranks second with 31% of the market’, - says Mr. Zolochebsky. He says in 2007 second half the operator was the leader by the number of new subscriptions (29.7% and 31.5% in QIII and QIV, 2007). MTS occupies 25% of the domestic corporate market, according to the company’s estimates.

Assessing the year’s results MTS emphasizes the increase in VAS consumption. The revenue from the mobile internet, MMS and RingBackTone grew 3.14-fold, 2.17-fold and 3-fold per subscriber, respectively. The company believes the increase in demand for VAS might become the key impetus for cellular operators’ development.

Leonid Melamed, president of MTS, says referring to analytical reviews that currently MTS accounts for about 31% of VAS market and more than 40% earnings from content services in Russia. Denis Kuskov, an independent analyst, considers the given data fair. ‘We intend to expand our share of audio, video and game content in every market, where we are presented. That is a long-term challenge’, - says Mr. Melamed. At the same time the market for voice services continues growing, but the proportion of voice services to the total amount of revenue is likely to decrease in favor of the VAS segment. ‘We expect the VAS market to generate $4.2 bn by 2012, the mobile internet provision reaching $3.4 bn’, - forecasts the MTS president.

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