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MTS steers a steady course and maintains 2020 guidance

Russian mobile operator MTS conceded it had faced considerable headwinds in the second quarter of 2020 because of the COVID-19 pandemic, but remained cautiously optimistic for the year ahead.

The operator said that although uncertainty remained, it now had "some additional clarity as we head further into the second half of the year."

In focus: While coronavirus stalled MTS growth, lockdown provided a TV silver lining.  (Source: Artem Beliaikin on Unsplash)
In focus: While coronavirus stalled MTS growth, lockdown provided a TV silver lining.
(Source: Artem Beliaikin on Unsplash)

It added it is reaffirming earlier full-year guidance of flat to 3% growth in revenue, -2% to flat in adjusted OIBDA, and cash capex of around RUB90 billion (US$1.2 billion).

President and CEO Alexey Kornya said that in the Q2 period the pandemic "had several major impacts on our company, most notably a steep drop in international roaming and slowdown in retail sales."


Lucky lockdown
At the same time, MTS benefited from lockdown measures imposed to slow the spread of the virus, increasing the pay-TV subscriber base by around 7% quarter-over-quarter to 4.9 million users.

MTS said its share of the pay-TV market increased to 46.2%.

"Despite volatility and headwinds," the operator managed to increase group revenue by 1.3% to RUB117.7 billion ($1.58 billion) in Q2, while group adjusted OIBDA rose slightly by 0.6% and reached RUB51.6 billion ($694 million).

Cash capex fell by 9.1% to RUB 20.6 billion ($277 million), and the operating profit dropped 4.2% to RUB26 billion ($349 million).

Kornya noted that MTS has now received a 5G license in Russia "with a specialized millimeter wave spectrum."


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"While the commercial 5G rollout is still some time away, we are targeting initial limited use cases with the Internet of Things, such as industrial process automation," he said.

"In addition, we are also launching 5G smartphone sales in our retail stores to begin driving revised penetration on our network."

MTS has also launched Marvin, its in-house artificial intelligence-based virtual assistant.

In terms of its fiber-to-the-home network, MTS said it reached over 2.1 million subscribers in Moscow.

Mobile services in Russia remains its biggest business, accounting for RUB81.2 billion (1.1 billion) of revenue and with a subscriber base of 77.2 million.

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— Anne Morris, contributing editor, special to Light Reading

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