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MTS says price rises must continue
|09 июня 2009|
Higher prices for mobile phone calls in Russia should help cellular providers post single-digit revenue growth in ruble terms in 2009, according to the country's No. 1 operator by users, MTS.
"There have been price increases by the country's three biggest operators - not massive increases and not across the board," MTS Chief Executive Mikhail Shamolin said in an interview."But this must continue in order to support investments."
Operators such as New York-listed MTS and rival OAO Vimpel Communications have seen sales suffer as Russia's first recession in a decade pushes unemployment higher. Compounding that, the companies must repay loans taken in U.S. dollars, with that currency now significantly stronger against the ruble than a year ago.
Shamolin said some subscribers don't react to tariff increases, while others switch to cheaper tariffs when they see call prices rise.
"It's about making those who can pay do so; those who can't can change their plan," Shamolin said."It's like an airline, when one passenger may have paid $1,000 for his ticket, while the person sitting next to him paid only $300."
Shamolin said MTS has seen an improvement in market conditions since the first quarter, a period many economists say probably represents the trough in Russia's downturn.
"In the second quarter, average monthly user revenues and usage levels have both risen," Shamolin said.
He said a proposed merger with sister company OAO Comstar United TeleSystems - which, like MTS, is controlled by conglomerate AFK Sistema - offers access to Comstar's potentially lucrative fixed-line broadband Internet business.
"Fixed-line broadband has clear advantages over mobile in terms of speed and capacity."
MTS is already active in parts of the former Soviet Union but is unlikely to push further afield in the foreseeable future because there's a shortage of suitable acquisition targets.
"The only intriguing market is India," Shamolin said, but he noted that Sistema already operates there through its Shyam Telecom unit.
Closer to home, Kazakhstan and Azerbaijan are also attractive to MTS."If we go anywhere, it would be there," Shamolin said."But, again, opportunities are limited at present."
Источник: Total Telecom