2013 results of the “Big three” Russian mobile operators - comparative analysis

MTS, MegaFon and VimpelCom, the three largest mobile operators in Russia, reported revenues of €9.5bn from mobile services in 2013, a 49% year-on-year decrease in comparison with 2012. During the same period the operators’ SIM card base in Russia stood at 201.9 million. By 31 December 2013 MTS had attracted 75.3 million subscribers, 5.2 million more than MegaFon, the second largest provider. VimpelCom, the third most prominent operator, reported 56.5 million SIM cards, and thus 24% of the market volume. MTS also had the strongest position in terms of revenues, operating profit and operating margins. Revenues from the Russian mobile services of the market leader reached €6.44bn last year. However, in terms of net profit, VimpelCom outperformed its rivals by achieving a consolidated result of €1.35bn. The average blended ARPU generated by major Russian operators was €6.6 in 2013, a 12% year-on-year decrease from the year before.
There has been a slight constant increase in the revenues of all three mobile operators over the last few years, however, in 2013 itself the combined revenues of Big-Three stagnated compared to 2012. MTS has remained a leader in terms of revenues reported from mobile services during the period in question. Its revenues in Russia grew from €4.5bn in 2007 to €6.44bn in 2013. The situation pertaining to second place was fluid. Until 2010, VimpelCom was slightly ahead of MegaFon, but the last two years’ results show that MegaFon is the second force on the mobile market in Russia today. In 2013 its revenues from mobile operations came to €2.74bn, approximately €1.3bn more than those of VimpelCom. An upward trend in mobile data revenue is also visible on the market. This is reflected in the overall CAGR of the revenues of the three operators from such activity between 2010 and 2013 of approx. 50%.
There have been relatively healthy increases in the operating profits of the three mobile operators over the last five years (excluding the crisis-related slump of 2009). At the beginning of this period – in 2008, MTS reported a 44% increase in OIBDA in comparison with 2007. The most recent reports show that in 2012 the operators achieved a significantly lower, but still respectable, rate of growth. MegaFon, which reported a 45% increase in operating profit, led the field in terms of growth in 2013.
Extracts from operators’ financial and operational statements for 2013 provide further details of their performances. In terms of overall revenues, the most substantial revenues from mobile data transmission (€905m) were achieved by MegaFon. VimpelCom made the most substantial net profit. The operator, as well as MegaFon, also led the field in terms of ARPU. They succeeded in achieving €6.7 per SIM card last year.


Selected financial and operating indicators of the three largest mobile operators in Russia, 2013
*Off-net incoming calls included.
PMR, 2014
  MTS MegaFon VimpelCom
OIBDA/EBITDA margin (%) 44.4% 43.6% 42.7%
Net profit (€ m) 1,309 1,054 1,351
Number of SIM cards (m) 75.3 70.1 56.5
ARPU (€) 6.3 6.7 6.7
MOU* (minutes) 327 296 293