Russian MTS's Uzbek unit increases subscriber base almost sixfold in 2015

By bne IntelliNews March 22, 2016

The subscriber base of Universal Mobile Systems (UMS), a joint venture between the Uzbek government and Russia’s Mobile TeleSystems (MTS), reached 1.095mn in 2015, according to MTS's report on the fourth quarter. The number of subscribers increased almost sixfold since the end of 2014.

UMS started operations in December 2014, putting an end to a dispute between MTS and the Uzbek government that had lasted since July 2012. Uzdunrobita – MTS's local subsidiary – was Uzbekistan's largest mobile operator with 9mn subscribers in July 2012 when local authorities brought charges of tax evasion and illegal use of equipment. Tashkent swiftly revoked its operating licence and launched claims to the tune of $600mn. The dispute was eventually settled in July 2014, when the two parties agreed to transfer Uzdunrobita's assets to a new operator, UMS, in which MTS will hold a 50.01% stake and the rest will be in the hands of the Uzbek government. An ongoing arbitration case brought forward before the International Centre for Settlement of the Investment Disputes (ICSID) was eventually discontinued in November.

The company’s market share increased from 1% in 2014 to 5.4% by the end of 2015.

It increased sales to UZS82.4bn (€12.6mn at the black market exchange market) in the fourth quarter from UZS54.4bn in the third quarter. It incurred operating losses to the tune of UZS63.6bn and net losses worth UZS22.1bn in the fourth quarter.

OIBDA stood at positive UZS2.6bn. MTS expects continued positive OIBDA in 2016.

The average traffic per user decreased slightly to 527 minutes in the fourth quarter from 530 minutes in the third quarter.

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