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MTS is one of Russia's largest mobile operators and the centre of a group that includes a bank, media services, an advertising business and a cloud platform. The company long ago stopped being just an operator and is building a set of services around the subscriber. Its shares trade on the Moscow Exchange under the ticker MTSS.
The core of revenue is what subscribers pay for voice and internet access. This is highly predictable income: people pay every month regardless of where the economy is in the cycle, and that is exactly why telecoms are traditionally regarded as a defensive sector. But stability comes at a price — the market is saturated: almost everyone already has a SIM card, and the only ways to grow are to raise prices or to sell the subscriber something else.
Hence the second part of the model — services built around connectivity: a bank, a media subscription, advertising, cloud services for business. They grow faster than connectivity and are gradually increasing their share of the group's results.
The cost side has its own specifics: the network requires constant investment — new equipment, spectrum, maintaining coverage. This spending is not discretionary; it is dictated by the technology cycle, which is why an operator's free cash flow is always lower than its profit on paper.
Mobile and fixed-line communications, home internet and television.
The group's bank: cards, loans, deposits, merchant acquiring.
An online cinema, a music service, ticketing platforms.
Cloud services, the internet of things, advertising technology.
Strengths and weaknesses describe the business itself. Opportunities and threats describe what may happen around it.
The company provides mobile and fixed-line communications, internet and television, and is also developing a bank, media services, advertising technology and cloud solutions for business.
Because the subscription fee is one of the last expenses people give up: connectivity is needed regardless of the state of the economy. An operator's revenue therefore fluctuates far less than that of commodity companies.
Building and upgrading a network requires large investments long before they pay off, and such programmes are usually financed with debt. When interest rates are high, servicing it takes a noticeable bite out of profit.
The company has traditionally been one of the dividend stocks of the Russian market and adheres to its announced payout policy. Current amounts and record dates are in the dividends section of the company page.