MTS Ecosystem verticals and position in the Russian market

Key markets in the context of verticals

\\Telecom

mts.ru

MTS is the largest mobile service provider in Russia and a dynamically developing ecosystem.

• No. 1 by mobile business income and number of subscribers in Russia.
• No. 1 by speed of B2B segment income growth (including income from Cloud, MTS Marketolog verticals).
• No. 2 in the landline services market.
• More than 98 % of population are covered by the MTS networks in the licensed territory of the provider.
• 85% of the population are located in the LTE coverage area.

\\Fintech

mtsbank.ru

Fintech vertical develops financial services of the MTS Ecosystem. MTS Bank means convenience, simplicity and understanding of the customers’ daily needs.

• MTS Bank is within top ten most innovative banks of Russia according to Skolkovo Fintech Hub (Sk Fintech Hub).
• MTS Bank is the Bank of the Year in the field of industrial solutions development for marketplaces — Financial Elite of Russia Award (Financial Elite of Russia 2023 Award (finelita.ru)).
• MTS Bank website is recognized the best according to all-Russian competition 2023 Runet Rating in the nomination Finance, Investment, Banks (2023 website rating (texterra.ru)).
• MTS Bank app in Rustore is the leader of the best mobile banks rating in 2023 according to Brobank.ru based on user analysis (Runet Rating (ratingruneta.ru)).
• MTS CASHBACK card is the leader of the rating of the best credit cards with Cashback in the supermarkets according to Vyberu.ru (vbr.ru).
• MTS debit card received the award in the rating Frank Debit Cards Award 2023 in the nomination The Best Customer Journey of Debit Card Issue (Frank Debit Cards Award 2023).

\\Retail

MTS retail network is the main channel of MTS subscriber engagement, the largest telecom retailer in Russia.

Being the points of contact with the MTS Ecosystem, MTS retail outlets increase the volume of cross sales. In the Company’s offices the subscribers receive a full spectrum of telecom services provided by the operator. The customers may access the wide list of financial services: consumer lending, money transfers, loan repayment, life insurance (voluntary medical insurance) and goods insurance, MTS Bank cards. The own sales channel enables more effective management of quantity and quality of connections, and service level maintenance.

shop.mts.ru

No. 1 in the rating of the Russian online shops among telecom retailers and No. 5 in the category “electronic and domestic appliances” (Retailers Rating).

Vectors of MTS retail network strategic development:

• point of entry in the MTS Ecosystem;
• showcase for sales of the MTS digital ecosystem products and its partners;
• introduction of best industrial practices;
• expansion of the product range that is complementary to the MTS Ecosystem.

\\MWS

cloud.mts.ru

MWS is a structural subdivision of MTS Group responsible for cloud infrastructure development. The cloud ecosystem of MTS includes solutions in the format of private, public and hybrid clouds, a complex of consulting and professional services, services of data centers and telecom services.

• No. 1 in IaaS Enterprise 2023 rating (CNews).
• Among the TOP 5 providers of the cloud infrastructure services market (IaaS+PaaS) by revenue (iksconsulting.ru).
• Ranked 1 as per DRaaS (CNews).
• > 5000 customers build their business using MWS solutions.

Strategic objectives of MWS:

• building the business comparable to telecom;
• multiple growth of revenue in the nearest five years;
• conquering the leading position in Cloud, as well as AI and Edge Cloud.

\\MTS Smart Home

gulfstream.ru

Combination of MTS Big Data technology and experience of Gulfstream Security Systems Company makes it possible to expand the list and to reliably improve the level of services in the field of security and comprehensive protection of private and commercial real estate.

In Russia the company provides the monitoring services in more than 200 cities under Gulfstream trade mark, has around 360 response partners, more than 500 thousand customers, more than 100 thousand facilities are under protection.

Areas of development:

• security (protection against penetration and accidents, smart insurance, climate control, payment of utility bills);
• video analytics;
• services of geolocation and assistance (health care, SOS button, geotracking of children and relatives);
• home services (communication with management companies, delivery, household services etc.).

\\MTS Link

mts-link.ru

MTS Link is a new brand of Webinar Group Company — a Russian developer of services for business communications and cooperation.

MTS Link is within the top five leaders of the Russian market of solutions for videoconferences according to TelecomDaily.

• 15 years in the market.
• 30 million participants of events annually.

\\MTS Launcher

mts.ru

MTS Fog Play gaming platform enables the owners to rent out their powerful gaming PCs for virtual rent to other players. In the end of December 2023 MTS Fog Play app for Android TV was launched – the opportunity to use one’s Android-smartphone as a gaming console and play PC-games on one’s TV set. In 2024 MTS plans to increase the size of its audience of gaming console users.

\\MTS Defender

zaschitnik.mts.ru

Security technology platform: blocking of spam calls, control of data leaks, monitoring of loan applications.

Defender service is already included in MTS Premium and MTS Junior subscriptions, and in MTS Super plan. Additional option “Financial Protection” enables the customers to find out about the fraudulent attempts to do harm and to take immediate action.

\\AdTech

marketolog.mts.ru

MTS Marketolog is the service for independent launch of targeted mailing and online advertising based on Big Data technology (anonymized data on the operator’s subscribers make it possible to show the advertisement only to the audience that it may interest).

omnichannel.mts.ru

MTS OmniChannel is a platform to mail messages to the own base for large and medium business via SMS, push, e-mail, Viber, VK, Ok, chat center, chat bots.

ads.mts.ru

MTS ads is a complex platform service for large business promotion.

mediascout.ru

MediaScout is the official operator of advertising data, included in the register of the Federal Service for Supervision of Communications, Information Technology, and Mass Media. According to the Association of Interactive Advertisement Development (AIAS) it was recognized as the most sought after operator of advertising data (Gazeta.Ru).

\\MTS Media

media.mts.ru

MTS Media produces and distributes original and licensed VOD and TV-content via cable/IPTV, satellite TV and OTT-platform.

KION.ru

• KION is the leading streaming video service and provider of entertainment content.
• No. 2 by dynamics of online cinema audience growth (according to TelecomDaily).

Priority areas of MTS Media development:

• transformation of KION online cinema into the entertainment media service;
• multiple growth of audience with high involvement;
• use of Big Data tools to improve convenience of personalized interface and quality of TV-content recommendations.

\\MTS Entertainment

Live.mts.ru

MTS Entertainment (MTS Live brand) is a subdivision within MTS Group and part of the MTS Ecosystem, is responsible for development of the projects in the sphere of entertainment and management of the Company’s assets in this segment.

MTS Live customers gain access to all advantages of the ecosystem: special offers of MTS Premium subscription and the opportunity to spend bonuses of MTS Cashback program for purchases in the MTS online shop, for communication services, KION, MTS Music, MTS Bank etc.

MTS Live — No. 1 in the segment of offline entertainment

Activities:

• organization of own offline and online events;
• management of ticket operators and network of own concert venues;
• investments into own performances and musicals.

\\Stroki of MTS

stroki.mts.ru

Services for readers: books, podcasts, audiobooks and many more. Online and offline reading. For MTS subscribers, mobile Internet in Stroki is not billed and will not spend the included traffic.

\\MTS Fog Play

fogplay.mts.ru

MTS Fog Play gaming platform enables the owners to rent out their powerful gaming PCs for virtual rent to other players. In the end of December 2023 MTS Fog Play app for Android TV was launched – the opportunity to use one’s Android-smartphone as a gaming console and play PC-games on one’s TV set. In 2024 MTS plans to increase the size of its audience of gaming console users.

\\MTS Travel

travel.mts.ru

MTS Travel is a subdivision within MTS Group, it creates and develops services for travelers in Russia and all over the world: services for booking hotels, apartments and other accommodation facilities, as well as transport tickets; own media for travelers.

MTS Travel is among the TOP 3 in terms of the number of bookings (travelline.ru).

MTS Travel activities:

• development of hotel booking showcase;
• development of a mart for purchasing transport tickets;
• development of IT products for hoteliers and tourist accommodation owners based on the Bronevik.com platform;
• creation and development of own media for travelers — the MTS Travel online magazine, SMS guides and the Subtleties of Tourism portal
• expansion of the ecosystem loyalty program capabilities in the interests of travelers (discounts, increased cashback, additional benefits for bookings).

\\ MTS Urent

urent.ru 

E-scooter and e-bike sharing service.

• No. 1 by geography of representation for scooter rent services in Russia.
• 124 cities of the Russian Federation — geography of service.
• 100 thousand scooters — size of own URENT fleet.
• 7.8 million customers with travels at year-end 2023.

\\MTS Belarus

mts.by

In Belarus the volume of revenue for 2023 reached BYN 1602.1 million (7.6 % growth vs 2022) mostly at the expense of growing income from communication services and income from sales of telephones, accessories. Annual growth of OIBDA before capitalization was 3.8 %, having reached BYN 663.1 million for 2022. The main drivers of the parameter growth are income from communication services, video servers and additional services. The subscriber base was 5.7 million users as of the end of 2023.

The main vectors of development are:

• maintenance of the positive growth rates of the mobile business;
• maintenance of the subscriber base;
• development of Cloud, cybersecurity and financial services areas.

Main metrics by MTS business segments

\\Ecosystem

• >RUB 156 billion — ecosystem revenue for 2023, +20.5 % — growth of Q4 2023 vs Q4 2022.
• 15.1 million ecosystem customers as of the end of 2023.
• +24 % — growth of MTS Premium program users Q4 2023 vs Q4 2022.
• +46 % — growth of customers with cashback charge within MTS Premium Q4 2023 vs Q4 2022.
• 1.7 billion transactions of seamless entrance using MTS ID service for 2023.
• +42 % — growth of users (MAU) of MTS Music service Q4 2023 vs Q4 2022.
• +30 % — growth of users with subscription to MTS Stroki Q4 2023 vs Q4 2022.
• 2-fold — growth of DAU service MTS Launcher Q4 2023 vs Q4 2022.

\\Telecom

• RUB 440.1 billion — revenue from communication services in Russia for 2023, +7.2 % — growth Q4 2023 vs Q4 2022.
• +15 % — growth of BBA income year-on-year.

\\Retail

• +20.4 % — growth of revenue from telephone sales year-on-year. Successful recovery of sales in retail business.
• Expansion of smartphone range from Chinese vendors: double sales growth.
• Growth of sales of new ecosystem products: MTS Launcher — 3-fold, MTS Defender — 5-fold year-on-year.
• Launch of communication subscription sales (communication services package with a discount for a certain period of time).

\\Fintech

• 3.8-fold — net profit growth. RUB 12.5 billion — net profit in 2023.
• +36 % — growth of MTS Bank income. RUB 91.3 billion — income in 2023.
• +33 % — growth of retail credit portfolio Q4 2023 vs Q4 2022.
• +56 % — growth of commission income in 2023.
• 3.8 million customers of MTS Bank as of the end of 2023.

\\MTS Media

• RUB 18.8 billion — revenue of MTS Media in 2023, 18.3 % — growth vs 2022.
• +19 % — growth of paid TV users.
• +60 % — growth of users (MAU) of KION online cinema Q4 2023 vs Q4 2022.
• +23% — growth of the number of viewing hours per user, year-on-year.
• Every month — launch of new series on KION.
• 76 % share of viewers watching KION Originals.

\\MTS Music

• 53% —growth of DAU product vs 2022.
• Top-3 Russian musical streaming services by audience volume.
• 3 hours 59 minutes per month — average time of listening per user.

\\AdTech

• >50 % — growth of revenue of MTS Marketolog year-on-year.
• >60 % — growth of number of unique contracts year-on-year.
• 1.7-fold — growth of number of registered users as a result of signature of an exclusive contract for promotion of advertisement and management of tools in Telegram.

\\MTS Live

• +78 % — growth of annual revenue.
• RUB 20 billion GMV for 2023.
• +47 % — growth of ticket sales for 2023.
• > 1 million people visited own events of MTS Live in 2023.

\\MTS Travel

• 10-fold — growth of number of hotels on MTS Travel showcase by foreign assortment.
• 2.3-fold — growth of number of bookings per quarter (Q4 to Q3 2023).
• 70 % — share of bookings with cashback in Q4 2023.

\\MTS Fog Play

• 75-fold — growth of segment revenue from the moment of launch in the end of 2022.
• 190 thousand users as of the end of 2023.
• 790 thousand — number of payments made.
• +39 % — growth of retention of gamers in 2023.

\\MTS security services

• +80 % — growth of users of Defender service Q4 2023 vs Q4 2022.
• > 5 thousand DDoS-attacks were repelled by the defense service with comprehensive support from MTS in 2023.
• 2.5 million fraudulent incidents were identified by the own antifraud-system Fraud Detection Platform.
• 940 million spam calls were blocked by Defender in 2023 (2.5 times more vs 2022).

\\MTS RED

• 3 new managed cybersecurity services were launched into the market: protection against DDoS attacks (Anti-DDoS), increasing cyber literacy of the company employees (Security Awareness) and encryption of communication channels as per GOST.
• The range of services and technological partnerships of the MTS RED SOC center for monitoring and responding to cyber attacks has been expanded.
• Revenue grew by 84%, while customer growth exceeded 120%.
• In 2023, the MTS RED SOC center for monitoring and responding to cyber attacks repelled more than 50 K attacks on customers, over 12 K thereof were potentially critical for business

2023 Highlights

Corporate news

In March, MTS announced global rebranding. The MTS brand has a new architecture, positioning, a new logo and visual language in general, as well as a unique identity for individual products.

M&A

In February, MTS announced the closing of a transaction to acquire a 67% stake in the capital of Buzzoola group, one of the leading AdTech companies in Russia and the CIS. The purchase of Buzzoola allows MTS to accelerate the development of its own AdTech direction and increase the share in the advertising market.

In April, a subsidiary of MTS Stream acquired 100% of the shares of Segmento from Sistema_VC. As a result of the transaction, MTS strengthens its own advertising contour, as well as its position in the AdTech market.

In April, MTS acquired 51% of SCOUT-KR to develop smart vehicle solutions.

In June, MTS announced the purchase of 41.62% of the largest Russian provider of security services and smart home solutions. MTS also completed the reorganization of the Smart Home line, the purpose of which was to consolidate assets and projects related to security and the introduction of digital systems for home and office management.

In September, a subsidiary being MTS Entertainment acquired an 85% stake in Ticketcloud LLC (Ticketscloud platform), one of Russia’s leading full-cycle services for event organizers. The transaction allows MTS to strengthen its position in the ticket sales market and significantly increase its market share.

Innovation and Products

In April, MTS announced the launch into commercial operation of a cloud platform for fast and flexible creation of MTS Exolve communication services, the functionality of which has become fully available to all users.

In July, MTS announced the creation of its own generative network Software 2.0, which will reduce the time for program code development. Application of Software 2.0 allows to reduce the time for finding and correcting code errors and speeds up the entire process of developing and bringing new ecosystem products to the market.

In July, MTS announced its entry into the digital financial assets market. The Bank of Russia included an affiliate of MTS and the developer of its own platform, DFA HUB, in the register of operators of information systems in which digital financial assets are issued.

In December, MTS launched the Front Platform constructor, which will speed up the launch of internal and external services on ecosystem marts by 30%.

In December, MTS conducted successful pre-commercial testing of XGS-PON fixed Internet technology on its backbone network in Moscow with data transfer speed rates reaching up to 10 Gbps, which is ten times higher than the current home Internet speed rates in Russia.

Significant Events after the Reporting Date

In January 2024, MTS announced the closing of a transaction for the sale of 100 % shares of MTS Armenia CJSC (Viva-MTS trademark), its subsidiary in the Republic of Armenia, to Fedilco Group Limited (Republic of Cyprus). The transaction scope also included MobiDram CJSC, a payment system providing financial services in the Armenian market, a 100 % subsidiary of MTS Armenia. MTS obtained all corporate approvals required for the transaction, as well as permits from regulatory authorities of the Republic of Armenia: the State Commission for Protection of Economic Competition and the Commission for Regulation of Public Services.

In January 2024, MTS announced the closing of a transaction for the acquisition of a stake in UrentBike.ru LLC (Urent service), as a result of which MTS increased its stake in the capital of Urent from 11.8 % to 80.6 % by purchasing stakes from the company’s founders. According to the terms and conditions of the agreement, the Urent team led by Ivan Turinge, the company CEO, will continue to manage the project; the key shareholders will continue to participate in the company’s activities in order to develop the business as per the approved strategy.

In February 2024, MTS Board of Directors decided to appoint Vyacheslav Nikolaev, the current President, for another term (three years starting from March 13, 2024).

MTS Ratings

Credit Ratings

In January 2024, the Russian rating agency NCR (National Credit Ratings LLC) confirmed the AAA.ru credit rating of MTS with a stable forecast. NCR noted a number of main factors in the activities of MTS that impacted the maintenance of the highest rating level: low systematic risk of the business profile of MTS, high geographic diversification and customer base stability, moderate debt burden and a margin of safety for debt servicing, significant operating profitability, as well as a sufficient liquidity level.

In December 2023, the Expert RA Rating Agency confirmed the ruAAA (the highest level on the national scale) credit rating of MTS with a stable forecast. In its report, the agency emphasizes the strong market and competitive position of MTS, moderately low debt burden with average coverage of interest payments and high quality of corporate governance, as well as a sufficient forecast liquidity level.

In December 2023, the ACRA rating agency assigned the Company the highest credit rating at the level of AAA(RU) with a stable rating forecast. The credit rating is based on high assessments of the operational and industry-specific risk profiles taking into account a wide range of business areas and the Company’s own telecom infrastructure.

Sustainable Development Ratings

Assessed by	Rating date	Assessment tool and subject	Result	Reference
RUIE	January 2023	ESG index of RUIE	MTS was among the leaders of the ESG index “Responsibility and Openness” of the Russian Union of Industrialists and Entrepreneurs (RUIE). MTS became the only ecosystem of digital services among the rating leaders	ESG indices and ratings of RUIE in the field of sustainable development (rspp.ru)
RAEX	July 2023	The first topical ranking “Top 50 Russian Companies Paying Great Attention to Human Rights, Diversity and Inclusion Issues”	MTS became the leader in the RAEX ranking of companies with a developed inclusive culture. MTS was assigned the highest level of AAA	Top 50 Russian Companies Paying Great Attention to Human Rights Issues (raex-rr.com)
RBC	September 2023	ESG index of RBC	MTS was among the largest companies with a high I level of introduction of ESG practices at year-end	Going Green: 2023 ESG Index Results | RBC Trends (rbc.ru)
AK&M	September 2023	2023 Social Performance Rating of the largest Russian companies	MTS took first place in the social performance rating in the Largest Holding Companies category	Social Performance Rating (akmrating.ru)
Association of Grant-Providing Organizations “Donors Forum”, “Kommersant” newspaper	October 2023	Rating “Corporate Philanthropy Leaders”	MTS confirmed the highest A+ category of the socially responsible business rating	Corporate Philanthropy Leaders – Activities – Donors Forum | Association of Grant-Providing Organizations (donorsforum.ru)
Forbes	November 2023	Rating of the best employers in Russia according to Forbes 2023	MTS is one of the two best employers in Russia according to Forbes. The company was awarded the platinum status in three parameters of the Forbes rating of the best employers in Russia: “Employees and Society”, “Environment” and “Corporate Governance”. Top 10, ranked 7th	30 largest investor companies in Russia – 2023. Forbes Rating | Forbes.ru
AK&M	December 2023	Rating of non-financial reporting of companies	MTS received the highest score in the non-financial reporting rating prepared by the AK&M rating agency based on the results of studying MTS SDR for 2022. The agency noted a significant improvement in the quality, expansion of the scope and level of detail of the information provided on ESG initiatives and the contribution of MTS Group to the sustainable development of society	ESG Reporting Rating (akmrating.ru)