MTS

Creation

CJSC Mobile TeleSystems (MTS) was established and registered in Moscow as a closed joint stock company on October 28, 1993. It included MGTS, Deutsche Telekom (represented by the DT Mobile division), Siemens and several other Russian shareholders. The Russian side in MTS owned 53% of the shares of the established company, two German companies - 47%.

In May 1994, the company's first base station was launched on Yablochkova Street in Moscow, and the operation of the MTS network was demonstrated at the Svyaz exhibition.

On July 7, 1994, the company began commercial activities in the Moscow region in the GSM-900 standard. In 1996, the Russian shareholders of MTS sold the shares of PJSC AFK Sistema and DeTeMobile (a subsidiary of Deutsche Telekom).

Strong growth, mergers and acquisitions in Russia

Since 1997, MTS began active expansion into the regions of Russia, both independently obtaining licenses and building networks from scratch in the Bryansk, Kostroma, Orel, Tver regions of the Central region, the Komi Republic of the Northern region, Belgorod, Voronezh, Kursk and Lipetsk regions of the Central Chernozem region, and acquiring regional telecom operators. In 1998, MTS bought CJSC Russian Telephone Company (RTK) and together with it acquired licenses for the construction of networks in the Smolensk, Pskov, Kaluga, Tula, Vladimir and Ryazan regions. In 1999, MTS launched dual-band GSM-900/1800 networks into commercial operation and began to use per-second billing.

In the spring of 2000, as a result of the merger of MTS CJSC and RTK CJSC, Mobile TeleSystems OJSC was formed, whose shares began to be listed on the New York Stock Exchange in the form of American Depositary Receipts (ADRs) by the middle of the year.

In the early 2000s, MTS rapidly increased its presence in the Russian regions: in 2001, the company provided cellular services in 21 regions of Russia; by the beginning of 2004, the licensed territory of the company covered the entire country, excluding the Chechen Republic and the Penza region.

In parallel, the number of subscribers grew rapidly: from more than 1 million in 2000 and 2 million in 2001 to 15 million in 2003, which was facilitated by the launch in late 2002 of the first tariff plans without a monthly fee under the Jeans sub-brand.

Acquisition of regional cellular operators

During these years, the company was an active player in the acquisition market, investing heavily in buying up regional cellular companies. In particular, MTS acquired Telecom XXI in the north-west of Russia (2001), BM Telecom in Bashkiria, Kuban GSM and Dontelecom (2002), TAIF-TELCOM in Tatarstan, Sibchallenge ”, Tomsk Cellular Communications (2003), Primtelefon in the Primorsky Territory, Digital Networks of Udmurtia - 900 CJSC, Astrakhan Mobile CJSC, Volgograd Mobile CJSC, Uraltel CJSC (2004), “ Horizon-RT in Yakutia, Sibintertelecom, Telesot-Alania (2005), Dagtelecom (2006), Bashsel (2007).

In 2008, MTS was close to taking over the Volga-based SMARTS, the largest Russian cellular operator that is not part of the Big Three, by offering its shareholders $1 billion, but this deal did not take place due to the economic crisis. Years later, MTS managed to acquire part of the assets of SMARTS: in December 2014, CJSC Penza-GSM, CJSC SMARTS-Ivanovo and CJSC SMARTS-Ufa, and in September 2016, SMARTS-Yoshkar-Ola .

Retail network expansion

At the end of the 2000s, while building its own retail network, MTS began to show interest in networks of cellular communication stores. In February 2009, MTS announced the purchase for $60 million of the cellular retailer Telefon.Ru with 512 stores, in April 2009 - the purchase of the Eldorado chain of stores (383 stores) for $ 22.85 million, in October 2009 - about purchase for $11 million 100% of CJSC Teleforum (180 stores). To manage its own retail, which at the end of 2009 had over 2 thousand points of sale, MTS invited top managers of the Svyaznoy network.

Purchase of integrated and backbone operators

By the end of the 2010s, MTS became interested in other segments of the telecommunications market. In October 2009, MTS announced the purchase for 39.15 billion rubles. 50.91% of the operator of integrated telecommunications services in Russia and the CIS OJSC COMSTAR - United TeleSystems, having entered the fixed-line communications market (the merger was completed in June 2011). In December 2009, MTS announced the acquisition of 100% of the backbone communication operator Eurotel OJSC, the deal amounted to $110 million.

In the summer of 2021, MTS acquired the B2B provider MTT, which provides interregional communication services to Russian mobile operators. The deal amounted to 5 billion rubles.

Expansion in regional broadband markets

Also during the 2000s, MTS bought up Russian regional operators of broadband Internet access. Among them - acquired in the summer of 2010 for $ 123.5 million + $ 94.4 million of the debt of Multiregion CJSC; bought in 2011 Barnaul "Intelek", Kurgan "Infocenter" and Tula "Altair". In October 2011, MTS bought for $162.87 million 100% of OAO Teleradiocompany TVT, which provided cable TV, broadband access and fixed telephony services in 15 cities of Tatarstan. In 2012, MTS acquired fixed operators Taskom CJSC in Moscow, Elf LLC and Efcom LLC in the Belgorod Region, Intercom LLC in the Republic of Mari El, ZhelGorTeleCom CJSC, Pilot LLC and TVKiK LLC in the Kursk region.

Rebranding, construction of 3G and 4G networks

In 2005, the company slowed down its revenue and capitalization growth rates. To accelerate the development of MTS went to serious innovations: launched a new billing system, unified reporting standards within the company and a new brand.

In 2006, the company carried out a rebranding in Russia, initially designing the logos of all the businesses of the Sistema Telecom group in a single graphic style. The new MTS logo consisted of two red squares located side by side. “MTS” was written in white letters on the right square, and the image of a white egg was placed on the left. Rebranding in other countries where MTS worked was carried out later. According to independent research, a year after the rebranding, the company's brand recognition increased from 84% to 91%.

The company continued to build networks and master new mobile communication standards. In 2007, MTS provided communications to all metro stations in Moscow and St. Petersburg, where all MTS communications services, including data transmission services, became available to subscribers.

In 2008, a federal 3G license was obtained in Russia, and in May of this year, the third generation network was launched in four cities of Russia - St. Petersburg, Kazan, Sochi and Yekaterinburg. In autumn 2008, MTS entered into a strategic partnership agreement with British Vodafone.

On May 21, 2010, MTS became a federal 3G operator, deploying new standard networks in all regions of the Russian Federation.

In July 2012, MTS launched digital TV broadcasting in 150 Russian cities, which increased the number of TV channels in TV packages and provided users with access to HD content and interactive services.

In April 2012, MTS launched a 4G network (TDD LTE) into test operation in the center of Moscow, and in July of the same year it was announced as one of the winners of the Roskomnadzor competition for a federal license to provide fourth-generation communication services FDD LTE in Russia. In May 2013, MTS expanded its 4G network in Moscow by launching the first section of the network in the FDD standard in addition to the existing LTE TDD network.

By the end of 2015, MTS launched LTE networks in all 83 regions of its presence, in the face of a shortage of frequencies, relying on the construction of tech-neutral LTE-1800 and multi-band LTE-Advanced networks.

On January 1, 2020, MTS launched the first Russian base station in Antarctica at the Progress Antarctic station.

Development of new markets

By the beginning of the 2010s, the limits of extensive development and construction of networks became obvious for Russian mobile operators - the marginality of the classic telecom business began to fall as the market for mobile and fixed broadband access became saturated, competition increased and new competitors appeared in the form of OTT providers supplying new services and content through the infrastructure of telecom operators. Telecom companies began to look for new directions of activity and opportunities, offering new products and services based on their networks or under their own brand.

In February 2014, MTS presented a new development strategy for 2014-2016 “Data. Differentiation. Dividends” with the main focus on the accelerated construction of mobile 3G / LTE networks, their convergence with fixed GPON / FTTB networks, the growth of smartphone penetration and business differentiation.

In 2017-2019, the updated strategy “Data. Digitalization. Dividends” with an emphasis on the digitalization of business processes and the active promotion of IT services. After the acquisition in 2015 from AFK Sistema of the system integrator and billing developer NVision Group, as well as the creation of the Innovation Center and the MTS StartUp Hub innovation incubator within the company, MTS announced its focus on the development of IT solutions, cloud and IoT services for corporate segment, strengthening the internal direction of Big Data, artificial intelligence, expanding the user digital ecosystem of mobile applications, OTT and IP services.

The period since 2012 was marked for MTS by expansion into new markets through a series of M&A deals and venture investments.

Fintech

In February 2012, JSCB Moscow Bank for Reconstruction and Development (OJSC MBRD), controlled by AFK Sistema, announced a change of its name to PJSC MTS-Bank, taking the MTS brand for further development. In October of the same year, MTS signed an indicative offer to acquire from AFK Sistema up to 25.095% of the authorized capital in MTS-Bank. The cooperation between the bank and the telecom operator opened up further opportunities for promoting financial and banking services on mobile devices and in the MTS retail network. In July 2018, MTS increased its share in the capital of MTS Bank to 55.24%, and by the end of 2019 to 99.7%, explaining the transactions by the need to achieve cross-synergies between telecom and banking products.

In September 2017, MTS acquired a 30% stake in LLC MC Sistema Capital to provide investment services. In October of the same year, MTS bought out 50.82% in the authorized capital of Cloud Retail LLC (LiteBox trademark, retail software developer) to enter the cloud cash market as a provider of solutions for servicing business clients.

In 2019, MTS took part in an investment round in Swipglobal (the owner of the Smart Wallet service) and received a 15% stake.

In November 2019, MTS presented its development strategy for 2021-2022. Customer Lifetime Value 2.0, which aims to create a product ecosystem with a personalized approach based on artificial intelligence, big data analytics and a single customer ID.

MTS Bank, according to management, has become the basis of the MTS Fintech vertical. The services of MTS Money and MTS Bank were merged into a single service, which was further transformed into a smart bank.

In 2021, the operator acquired a 51% stake in Factorin, a company developing a blockchain platform for trade finance. In the same year, MTS invested 85 million rubles in the TalkBank project, a service that positions itself as a "bank in instant messengers."

In March 2021, MTS registered Financial Systems and Technologies LLC as part of the development of B2B fintech products. To accelerate the implementation of the project, in May 2022, MTS acquired the credit broker Credit Consulting, the developer of the Simple Purchases service.

Satellite TV

In November 2014, MTS launched, under its own brand, satellite television broadcasting from the ABS-2 spacecraft to the main populated territory of Russia. Users got the opportunity to independently create video content and a convenient communication channel with the operator due to the SIM cards built into the set-top boxes.

cloud services

In March 2017, MTS announced the launch of the #CloudMTS platform based on its own data centers to provide cloud computing services to large businesses in all regions of its presence in Russia.

In September 2018, the company acquired 100% of the authorized capital of Avantage LLC, one of the largest data centers in Russia. In January 2019, MTS bought IT-Grad, one of the largest cloud providers in Russia.

Internet of Things and Smart City

By September 2018, MTS built the first federal network in Russia for Internet of Things services and devices in the LTE standard based on NB-IoT (Narrow Band IoT) technology.

In December 2018, on the territory of a residential complex in the city of Arsk in Tatarstan, MTS presented Russia's first integrated pilot solution for a smart city in the housing and communal services sector on the NB-IoT network: video surveillance systems, remote collection of meter readings, parking monitoring, environmental situation and household waste disposal. By the beginning of 2019, MTS had signed agreements on the development of smart-city solutions with administrations in 13 regions of the Russian Federation.

Medicine and education

In 2018, the company entered the telemedicine and distance education market. In April, MTS and JSC Medsi Group of Companies launched the SmartMed telemedicine platform for remote consultations with doctors and storing an electronic medical record in the cloud with access from a smartphone, and in September MTS introduced the Smart University online educational platform.

Entertainment and content production

In January 2018, MTS announced the acquisition of Praliss Enterprises, the owner of the Gambit Esports Limited club, and entering the eSports market.

In February 2018, MTS acquired two leading Russian ticket operators: 100% of OOO Moscow Directorate of Theater, Concert and Sports and Entertainment Box Offices (MDTZK; Ticketland.ru brand) and 78.2% of Cubichall - 100% of the owner of OOO Cultural Service "(brand Ponominalu.ru). These transactions allowed MTS to enter the market of cultural events and integrate ticketing services with loyalty programs.

In April 2019, the company acquired JSC United Russian Film Studios (Kinopolis) from a subsidiary of AFK Sistema. In November 2020, MTS Media LLC, a subsidiary of MTS, created to develop TV broadcasting and its own multimedia platform based on the MTS TV online cinema, announced the launch of a direct investment program in Russian film production.

On April 20, 2021, MTS launched the KION online cinema on the MTS TV platform. The MTS TV brand will continue to provide television services in the segment of cable and satellite TV and IPTV. The first line of the online cinema will include ten projects of its own production.

smart car

In June 2020, MTS announced the creation of a new direction for MTS Automotive, which combines technologies and products in the field of connected cars. For the implementation of the project, the company acquired 100% in the authorized capital of STOPOL AVTO and KOAGENT Rus, developers and suppliers of multimedia devices and on-board information systems for cars.

Owners and management

The main owner of the company is the Russian holding AFK Sistema, which, as of September 30, 2020, taking into account indirect participation through controlled companies, owns 56.37% of the shares. The remaining 43.63% of the shares are freely floated on the New York Stock Exchange and MICEX.

Chairman of the Board of Directors (since June 2019) - Deputy Chairman of the Board of Directors of AFK Sistema Felix Yevtushenkov, who replaced Ron Sommer, who headed the board since June 2009, in this position.

From 2011 to 2018 Andrey Dubovskov was the President of the company, from March 2018 to March 2021 this position was held by Alexey Kornya. Since March 2021, this position has been held by Vyacheslav Nikolaev.

Activities in Russia

Presented in November 2019, the development strategy of the MTS Group CLV 2.0 (Customer Lifetime Value 2.0) for 2020-2022 is aimed at providing the subscriber with a set of digital services outside of telecom services and creating a product ecosystem of the MTS group of companies based on the main telecom business with a seamless transition between services. MTS announced plans to develop a client-centric approach to increase the duration of a client's stay in the ecosystem by focusing on his needs, increasing his loyalty and providing him with favorable conditions when using a range of products.

Services for private clients

mobile connection

In Russia, MTS provides mobile communication services to 78.2 million subscribers in the GSM, UMTS and LTE standards. Various tariffs for calls are available to customers, package tariffs for mobile Internet and voice calls (for smartphones), tariffs for data transmission (smart devices, tablets and computers), long-distance and international communication and roaming services, as well as the MTS Connect application for calls via the Internet based on Wi-Fi Calling technology.

Fixed Internet and TV

MTS provides fixed telephony, broadband Internet access, digital, cable and IP television services in more than 200 cities in all federal districts of the Russian Federation, covering more than 9 million households.

The largest fixed-line operator of the MTS Group is PJSC Moscow City Telephone Network (MGTS), serving more than 2.1 million households using GPON technology with a data transfer rate of up to 1 Gbps.

Satellite TV services are also available to the company's clients. MTS provides TV broadcasting in all distribution media: cable, satellite, IPTV and OTT. In terms of the number of subscribers in traditional environments, the company ranks third in Russia.

Media services and entertainment

The company offers the MTS Music music streaming service, launched in 2016 in partnership with Yandex, since August 2020, it began to provide subscribers with a subscription to the Spotify music streaming service.

The company offers the MTS TV application for online viewing of TV shows and movies on different devices; MTS Live service for viewing online concerts and shows in 360 format and buying tickets for events with search functionality, personal recommendations and a loyalty program, integrated with MTS Ticketland and Ponominalu.ru ticket services; application "MTS Library" with e-books, audio books and magazines for subscribers of all telecom operators.

In March 2019, MTS launched an interactive media platform for esportsmen and gamers WASD.TV and a mechanism for selecting Gambit league players for professional esports teams.

Financial services and loyalty program

Since 2012, MTS and MTS Bank have been jointly developing an ecosystem of fintech products: an online payment service, a banking application and a line of MTS Money bank cards, POS lending, and also provide banking and financial services in MTS communication stores. A number of financial services are integrated with the MTS Cashback loyalty program to pay for MTS services, purchase devices in MTS communication stores, services and goods of partners.

In July 2018, MTS and Sistema Capital MC developed the MTS Investments service for retail investors to invest in shares and bonds of Russian and foreign issuers.

Retail chain, e-commerce

MTS, through its 100% subsidiary JSC RTK, has a retail network of 5,180 customer service outlets, sales of mobile devices and accessories, financial and banking services. The company develops sales channels for subscriber devices, accessories and services through its online store.

Business Services

In addition to telecommunications services for corporate clients, MTS offers services using IT and cloud solutions, Big Data, AI, IoT technologies.

On the basis of BigData, the company has developed services for conducting online advertising campaigns through various channels (MTS Marketer for SMS mailings, banners on Internet resources and advertising on social networks); analysis of geodata, information about the infrastructure of the city and population density to select the best locations for opening and expanding a business.

AI technologies and complex software solutions are used in the contract management automation service (robot-lawyer), in chat bots for automated dialogue systems, in electronic trading services (“MTS Trading”), financial management and payment optimization services; verification of suppliers and partners (InsideReport); setting tasks (Workzen).

Internet of Things solutions are used in services for telemetering, remote monitoring of sensors and control of IoT and M2M devices in industry and housing and communal services.

MTS offers cloud services based on its own eleven data centers for data storage and processing (#CloudMTS), infrastructure rental in the cloud (1cloud), management of apartment buildings (Vdome), and organization of remote jobs.

The MTS Group of Companies also provides B2B clients with comprehensive solutions for organizing video surveillance and video analytics; geolocation services (“Mobile Employees”); an online cash service with a commodity accounting system (“MTS Kassa”), bank settlement and cash services, as well as various information security solutions, including through MTS’s own information security monitoring center.

Preparing for 5G

As of December 2020, the issue of granting frequencies and permits for the commercial operation of 5G networks has not been resolved in Russia. Based on the decisions of the State Commission on Radio Frequencies (SCRF) and temporary permits from Roskomnadzor, telecom operators can test 5G technology solutions and cases only within the test and pilot zones.

At the end of 2020, MTS had five permanent 5G pilot zones, where various tests and pilots have been conducted since September 2019: in Kronstadt in several locations in the city; in Moscow on the territories of VDNKh and the Skolkovo innovation center; in Tomsk on the basis of the Tomsk State University of Control Systems and Radioelectronics (TUSUR) and JSC NPF Mikran; in Vladivostok on the territory of the Far Eastern Federal University.

On the basis of its own corporate venture fund MTS StartUp Hub, the company develops and supports promising technology startups, and in July 2019 it launched an incubation program for 5G startups, providing selected projects with grants and the opportunity for long-term cooperation with MTS.

MTS stated that after signing the contract with Ericsson in the fall of 2017, it upgraded radio access equipment to the 5G ready level in the Volga, Northwestern, Siberian, Urals and Southern federal districts. In March 2020, MTS and Ericsson announced an agreement to deploy 5G-ready equipment for a large-scale upgrade of MTS's 2G/3G/4G networks in 16 regions of the Central Federal District of Russia. In September 2020, MTS and Huawei announced the start of a large-scale upgrade of the mobile network in Moscow and the Moscow Region to the 5G-ready level.

In August 2020, MTS received the first Russian license to provide 5G/IMT-2020 mobile communication services in the 24.25-24.65 GHz band in 83 constituent entities of the country. The license was granted by Roskomnadzor until July 16, 2025. The company said that after the approval of the Rules for the use of 5G equipment, business customers and large manufacturing enterprises will be among the first users of fifth-generation networks.

The company says it sees great potential for 5G radio access technology in dedicated technology networks (Private network).

In January 2020, MTS tested Russia's first industrial 5G dedicated network network at the KAMAZ plant in Naberezhnye Chelny. In October of the same year, MTS and Gazprom Neft announced the testing of Russia's first dedicated 5G-ready network for the needs of the oil industry. In November 2020, MTS signed an agreement with the Polymetal Group to build Russia's first commercial dedicated 5G-ready network at the Nezhdaninskoye gold deposit in the Republic of Sakha (Yakutia).

Support for open standards

MTS supports the trend towards the development of hardware and software systems for 5G networks based on international open standards and open source software. This approach will speed up the introduction of new technologies, reduce the cost of creating a network and IT infrastructure, and will also allow localizing the production of telecommunications equipment in Russia.

In December 2019, MTS joined the Telecom Infra Project (TIP) global initiative, which unites the efforts of the world's ICT companies in developing the ecosystem of telecom equipment suppliers on the principles of an open and standardized architecture, and also signed an agreement with Skoltech and Element LLC on the development and production in Russia of equipment based on international open radio access standards of the Open RAN project.

In November 2020, MTS, the autonomous non-profit organization Telecommunication Technologies Consortium (ANO TT), Kryptonit Research and Production Company JSC and Skoltech established the Open Network Technologies Association to develop promising technologies in the telecommunications industry based on open international standards.