Global Expansion? We’d Rather Stick With Russia: MTS
Relaxed legislation and booming profits are just two reasons why Russia's biggest mobile service provider will not bother expanding into other countries, the firm's chief executive told CNBC.
"We have no real big plans...because we are going to concentrate on our market first of all. Because it is a very profitable market, much more profitable, for example, than in Europe and other countries," said Andrei Dubovskov, the CEO of MTS, speaking from the St. Petersburg International Economic Forum.
Dubovskov explained that infrastructure costs were often far lower in Russia than in other countries.
"We have no expenses for licenses. We spent approximately $100,000 for a 3G license, for example," he said, adding that such a low price was normal for Russia. "It is this behavior that creates the possibility to invest money into infrastructure, not into governments' pocket and in my opinion it is really good practice."
In comparison, a U.K. auction of 3G licenses in in 2000 bolstered governmental coffers by 22.5 billion pounds ($35.4 billion).
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Other than Russia, MTS operates in the former Soviet republics of Ukraine, Uzbekistan, Armenia and Turkmenistan. Around 11.7 million households use its fixed-line network and it has 2.3 million broadband users and 2.9 million pay-TV subscribers.
MTS posted an OIBDA (operating income before depreciation and amortization) margin of 42.6 percent in 2012, and forecasts a similar result for 2013. Dubovskov said the firm's next step is to increase smartphone penetration, and the activeness of its subscriber base.