Telecom

Mass market

In 2023, we actively developed and marketed favorable tariffs, in which each customer could choose the optimal set of both standard telecom services and a wide range of ecosystem digital products.

Expansion of the range of ecosystem services and deep study of our customers’ preferences in integration with Big Data allow us to perform the transition from traditional price competition in telecom products to creation of offers for consumer segments. This helps increase customer loyalty and emotional commitment to the brand, as well as improve customer experience.

In July 2023, the MTS ecosystem was expanded with a new tariff range, which included four offers: MTS Easier, MTS More, MTS Super and MTS as You Wish. In addition to the usual minutes, gigabytes and SMS, the tariffs provide opportunities to save on communication and digital services of the ecosystem.

In September 2023, MTS launched a unique advertising campaign “Happy Subscriber”. Based on unique knowledge about our subscribers, we offered individual conditions for options and tariffs suitable for a particular subscriber. Favorable offers for the ecosystem services, for example, for MTS Premium, were also prepared for non-subscribers of MTS.

The launch of convergent services is a part of the MTS ecosystem development program. Convergent products are one of the key tools to retain subscribers and increase their loyalty. Combining the capabilities of fixed-line and mobile communications, MTS designs and continues to develop convergent services. MTS intends to significantly increase the number of convergent subscribers. The Company is the only operator in Russia, which, in addition to standard telephony, Internet, cable or IPTV, also allows to connect to satellite TV services. The development of convergent products is one of the main drivers of fixed-line communication sales growth, which allows MTS to maintain the rates of subscriber base growth for fixed-line communication services outstripping the market.

MTS went on developing the area of operator mechanics with the leading vendors of subscriber equipment and partners of the non-telecom sector. The following offers were available to consumers:

• when buying a set of “smartphone with an MTS SIM card”, the consumer received a second phone as a gift;
• when buying a smartphone from a certain vendor, the consumer received communication services and accessories for a set amount of money as a gift;
• partnership programs. When fulfilling the conditions of the promotion (for example, when buying a promotional product or when reaching a certain amount of the bill) and concluding a subscription agreement with MTS, the consumer received a unique promo code to activate a discount on communication services.

Moreover, MTS launched a unique operator program “Communication as a Gift”. When purchasing any available smartphone in the MTS retail chain or in the online store Shop.mts with the MTS More offer, the subscriber received communication services as a gift for 3, 6 or 12 months, depending on the smartphone value.

MTS strategically strengthened its online channel. This was facilitated by the implementation of a set of activities in the online channel, as well as the introduction of operator mechanics on the trading platforms. As a result, MTS achieved a significant increase in online sales. Sales of SIM cards on the mts.ru website increased by 132 % over the year.

MTS developed and launched a federal SIM card, which will allow to significantly reduce the operating costs for logistics in the future.

MTS launched a new Single Number service, which allows to link two devices — a smartphone and an Android smartwatch compatible with eSIM. Thus, one can make and receive calls on one’s smartwatch using the same phone number that is used on one’s smartphone. It is important that the distance between the smartwatch and the smartphone does not matter. The service is activated online, so it is not necessary to visit the MTS store, which saves time significantly.

MTS entered into a technological partnership with Tinkoff Group. Within this partnership, MTS and Tinkoff will join their efforts to protect customers from spam and fraud and also expand the geographic presence of Tinkoff Mobile in 17 regions of Russia.

Retail distribution

The MTS retail chain remains the main channel for attracting MTS subscribers. More than 40 % of SIM card sales are carried out through MTS retail outlets. MTS own retail chain demonstrates high rates in the number and quality of SIM card activations.

At MTS offices, subscribers receive a full range of services provided by the operator, including the services of broadband access to the Internet and TV. Being points of contact with the MTS ecosystem, MTS retail outlets allow increasing cross-sales. Any new service released by the Company automatically becomes available for sale in the retail chain office.

Our own sales channel enables us to more efficiently manage the number and quality of activations, as well as to maintain our level of service.

Network development

MTS continues to develop and upgrade the network to ensure a consistent level of coverage and a high quality of mobile Internet. In 2023, more than 17,000 4G BSs were commissioned, +14 % of the network. The main increase occurred in large regions of Russia: Krasnodar Territory and Moscow are in the lead.

To maintain and expand the network quality, MTS is increasing the number of regions, in which it is redistributing the frequency spectrum to LTE technology (49 regions by the end of 2023).

Innovative Projects

Bridging the Digital Gap Project 2.0

As a result of the project implementation, mobile communication shall become available in 3.8 thousand small settlements with a population ranging from 100 to 500 inhabitants.

As of year-end 2023, 1,352 platforms were launched in 38 regions of the RF. By the end of 2024, it is scheduled to implement 2,458 platforms more. The project will include 79 regions of the RF as its participants.

In 2023, 6.7 thousand new customers were connected to the MTS network in the project locations and the quality of communication services was improved for 56.2 relevant MTS subscribers.

Refarming of the 2100 MHz band

Since 2018, the company has carried out refarming of UMTS 2100 in 50 regions of Russia by deploying LTE 2100 networks. In 2024, it plans to begin work on refarming UMTS 2100 in at least 10 more regions, and gradually turn the remaining UMTS networks off after 2025.

By the end of 2023, MTS completed the conversion of all UMTS 2100 base stations to the LTE standard within the Central Ring Road (CRR) of the Moscow region.

The UMTS 2100 refarming resulted in increased data transfer speed and network capacity by an average of 30%, improved coverage on the ground and signal penetration inside buildings – the LTE 2100 MHz base station has a greater range than LTE 2600 MHz. Increased LTE coverage also expands subscriber access to VoLTE voice transmission technology.

Refarming of the 900 MHz band in cities

In 2023, refarming of the 900 MHz band was implemented and LTE-900 was launched in Novosibirsk and St. Petersburg to improve the LTE coverage inside buildings.

Fixed Business

B2C fixed business

The share of Internet BBA penetration into the telecom market in 2023 reached 54 % (in 2022–53 %) on average in the RF¹. In 2023, the subscriber base growth rate in the market was 1.4 %: the main increase in physical terms was provided by the B2C segment, which accounts for almost 96 % of the BBA subscriber base in the RF. The increase in the number of users is associated with the commissioning of new residential buildings, the expansion of operator networks in the suburbs of cities and the private sector. Herewith, the fixed BBA market in the country remains saturated; further growth of users can be achieved due to cities (penetration of more than 70–80 %), as well as coverage of the private sector in the city suburbs.

¹ In early 2023, Rosstat (Federal State Statistics Service of the RF) published new data on the number of households in the RF obtained on the basis of the 2020 census. Previously, the last official data used was the data provided by Rosstat on the basis of the 2010 census. Over 10 years, the number of households in the RF increased by 11.5 million, this led to a decrease in such an indicator as the BBA service penetration among households.

Based on the 2023 results, ARPU increased by RUB 6 and amounted to RUB 379. The market continues to experience outstripping growth of proceeds driven by the annual service cost adjustment (by 4.7 %, while the subscriber base increased by only 1.4 %) by both the majority of federal operators and a number of regional players. Western sanctions, inflation, increased cost of equipment and contractor services result in the need to increase the cost of services for end users.

During 2023, the pay-TV market in the RF stopped growing: the subscriber base remained at the level of 46.5 million, the service penetration was 70 %. ARPU remained almost unchanged as compared to 2022 and amounted to RUB 191. The ARPU dynamics were influenced by multidirectional factors: on the one hand, the growth of tariffs and the development of VoD (video-on-demand) service provided through in-house and partner online cinemas; on the other hand, an increase in the share of pay-TV connections at a discount in a package with other communication services (BBA, mobile communication, etc.) Thus, the pay-TV market volume decreased by 0.6 % and amounted to RUB 106.4 billion.

Despite multidirectional trends in the fixed business market in 2023, MTS continues to maintain a leading position in terms of growth rates. The base is growing by 5.8 % due to Internet BBA subscribers and by 6.5 % due to pay-TV subscribers, as compared to 2022. In 2023, fixed business proceeds also go on growing steadily by 8 %. In saturated market conditions, MTS ensures growth due to the increasing penetration of convergent products into the subscriber base of Internet BBA and pay-TV from 4.8 % in 2022 to 6.4 % in 2023. At the same time, the trend towards migration of users to higher home BBA connection speeds (including the speed of 1 Gbps) impacts MTS base and proceeds’ indicators positively.

Fixed-line network

In 2023, MTS continued to implement a large-scale program of upgrade and construction of fixed-line networks:

• more than 505 thousand households built;
• more than 870 thousand households upgraded.

In 2023, the share of the 1Gb network in Russia increased by 9 % and amounted to 60 % of the total fixed-line network coverage.

Two FVNO projects in Voronezh and Samara/Tolyatti (more than 430 thousand households) were presented:

• Voronezh — under commercial operation;
• Samara/Tolyatti — preparation for commercial launch.

Convergent

The company continues to develop a range of convergent data plans. In 2023, the tariff range of convergent products was completely relaunched. Due to the changes made and the expansion of tariff offers, the share of subscribers who preferred convergent data plans exceeded 90 % of all connections to Home Internet and TV services.

In 2023, MTS expanded the geography of the partnership scheme for providing convergent subscriptions, within which convergent services are provided in settlements where MTS does not have its own fixed-line network. Within this product, the subscriber gets the opportunity to take advantage of all the benefits of the convergent with payment for all mobile and fixed-line services using a single personal account, while remaining a subscriber of his/her home communications service provider. Based on the 2023 results, this scheme was scaled up to 15 regions of the RF.

B2B/G

В2В

In 2023, MTS continues to grow by double digits. Growth of proceeds by 2022 was 15.6 %. The main contribution to the growth of proceeds was made by CCTV, IoT VR, IoT M2M, Cloud, ICS. Growth in the revenue of basic products shall also be noted.

В2G

In the coming years, MTS aims to increase the rate of growth of proceeds in the B2G segment by intensifying its participation in the national programs and federal government projects, as well as by developing a range of digital products, supplying B2B equipment and increasing the focus of regional teams in terms of selling Webinar Group products to government customers.

Already in 2023, the non-core proceeds in the government segment increased YoY by more than 30 %. The main contribution to revenue growth in the non-core area was made by activities aimed at import substitution of equipment and software for government customers and participation of MTS in regional programs.

In 2024, MTS will continue to work on import substitution in B2G through the supply of B2B equipment, the development of a range of digital products and MTS Link products, as well as on the development of its participation in the regional and national digital agenda of the region.

B2B products

Mobile Business

In the context of fundamental changes in the economy along with understanding that communication is the circulatory system of any business, MTS offered new opportunities to reduce costs and increase efficiency:

When paying for a tariff 6 months in advance, a company receives a vanity phone number that is easy to remember and increases the volume of calls from customers by up to 30 %.

• Taking into account the development of cargo transportation in a number of border regions, the Smart Business tariff includes free calls abroad from 1st to 5th minute.
• On some tariffs, transfer of remaining traffic to the next month was added.
• Over the year, it was possible to connect to mobile communication services with a discount of up to 50 % for six months within the Time for Advantageous Decisions promotion or double the packages of minutes and gigabytes without increasing the subscription fee within the Double Minutes and Gigabytes Forever promotion.

80 % of small businesses are interested in convergent solutions, because they are treated as solutions with the potential to save money and simplify interactions with the service provider. During the period from September to December, it was possible to subscribe to a package of the most necessary services — mobile communications, fixed Internet, CCTV and Wi-Fi — at a discount of up to 30 % within the MTS Business to Maximum promotion.

One of the main market trends is the flow of sales from offline to online. For MTS as a technology company, it is important to provide its customers with modern and familiar ways of receiving services. In 2023, the option of purchasing SIM cards with a corporate tariff on the website and in the MTS Business profile page without visiting the office or calling the manager was launched. This process takes about 5 minutes and helps businesses save time as their most important resource.

Fixed Business

In 2023, MTS demonstrated an increase in proceeds from fixed Internet access by 14.8 % as compared to 2022, which is 3 times higher than the market dynamics of +4.7 %.

These results are due to the growth of the active base of corporate subscribers by 10.8 % as compared to 2022 owing to optimization of the customer journey and process automation.

CCTV

In 2023, the growth of proceeds of MTS CCTV was 59 % as compared to 2022, the number of users increased by 1.8 times. Sphere — a control system by MTS — was launched; it is a comprehensive solution for large CCTV and security systems. Major CCTV projects in the transport sector were implemented with national customers and large businesses in the field of monitoring cargo movement and safety. The implementation of projects for passenger flow calculation based on video analytics started.

ICS and MTT JSC¹

Virtual multichannel telephony services based on Auto Attendant (federal and city phone numbers) and Free 8800 Call (8-800 format phone numbers) proved to be essential for remote work. The services allow to deploy telephony at the company without any wires or special equipment, since PBX functionality is arranged on the side of the MTS virtual platform.

In 2023, the product team expanded the platform capacity to meet the needs of the customers with high-intensity traffic.

¹ Intelligent Communication Network Services.

MTS Link

2023 became a period of major changes for MTS Link. Multiple platform updates were implemented, a large-scale rebranding was carried out and several new solutions were released to the market at once, namely MTS Link Boards interactive collaboration boards, and solutions, Link Rooms meeting room module, and beta testing of the Link Chats corporate messenger started.

Over the year, 5 million online events were held on MTS Link, that is 2.7 times more than in 2022. 1.7 million new users registered with MTS Link; in total, 30 million people took part in events in MTS Link services.

In terms of developing the product functionality, a great bet is made on the introduction of AI technology. For example, in 2023, MTS Link was the first among Russian video conferencing service vendors to introduce the functionality for automatically generating meeting summaries.

As a result of successfully implemented projects for import substitution of platforms for communications and online learning, MTS Link received ComNews awards in two categories: Best Digital Solution in Financial Sector and Best Digital Solution in Education. The company also received the Best Digital Platform award within CIPR-2023 and IT Leader in the nomination for Innovation Integrated into Business within Kazan Digital Week. Alexander Brovko, MTS Link Product Director, was featured in the authoritative Top 1000 Russian Managers rating.

Business in the Markets of Operation

Armenia

MTS Armenia¹ CJSC (MTS Armenia) is the largest of the three mobile operators existing in the Armenian market.

¹ On January 24, 2024 MTS announced closure of the transaction of selling 100% shares of its subsidiary in the Republic of Armenia MTS Armenia CJSC.

The company renders mobile and fixed-line telephony services, as well as offers cloud and financial services (payments and transfers are carried out by MobiDram CJSC as a subsidiary) for its subscribers.

The revenue for 2023 was AMD 53.5 billion (growth of +5% vs 2022), which is mainly due to the growth of revenue from the provision of the communication and financial services (via 100% subsidiary M-Dram CJSC). OIBDA before capitalization for 2023 was AMD 26.5 billion (growth of +6% vs 2022). The volume of the subscriber base as of the end of 2023–2.3 million users.

MTS Armenia completed 2023 with a market share of around 57 % in terms of both subscribers and income. . The average volume of calls per subscriber was 625 minutes per month and the use of data transfer services was 7.3 Gb per month.

The company confidently holds its leading market position in terms of net promoter score (NPS).

The own retail network of the Company is the main channel for subscriber engagement and includes 73 sales and service offices covering all regions and key cities of Armenia.

In 2023 the Company successfully launched the first 5G network. Currently the 5G network operates in the central districts of Yerevan and Gyumri.

Belarus

Mobile TeleSystems JLLC (MTS Belarus) was established in 2002 by MTS PJSC of Russia (49 %) and Beltelecom RUE of Belarus. The company operates under the MTS brand and is the largest mobile communication operator in the Republic of Belarus. Its main competitors are BeST CJSC (‘life’ trademark) and A1 UE (Unitary Enterprise).

In Belarus, MTS provides mobile communication services of GSM 900/1800, UMTS 900/2100 and 4G (including 2600/1800/800) standards, home Internet and TV services, offers cloud services and products for business, as well as financial services in partnership (MTS Money).

MTS Belarus is the leader in the mobile communication of Belarus with the largest market share in terms of the number of subscribers and proceeds.

MTS Belarus’ own retail chain is the main channel for attracting subscribers, together with single-brand stores of its partners. The chain of sales and service offices consists of 90 own offices and 227 single-brand partner retail outlets, which allows to connect subscribers and provide service operations in all regions and key cities/towns of Belarus.

MTS 2G communication covers 98.02 % of the territory of Belarus, where 99.91 % of the country’s population lives. MTS 3G communication covers 97.06 % of the territory of Belarus, where 99.88 % of the country’s population lives. MTS 4G-LTE communication covers 66.65 % of the territory of Belarus, where 98.42 % of the country’s population lives.

MTS Belarus maintained its leading positions, significantly outperformed its market competitors and completed 2023 with a market share of around 48 % in terms of subscribers and a market share of around 53 % in terms of revenue. The share of subscribers of V&D data plans is 64.6 % and the share of subscribers using data transfer reached 71.8 . The average volume of calls per MTS Belarus subscriber in Q4 2023 amounted to 557 minutes per month and the use of data transfer amounted to 19.2 gigabytes per month (+2.4 % year-on-year).

The company holds the leading position in the telecommunication market of Belarus in terms of net promoter score (NPS). According to internal marketing research, MTS Belarus is the leader in terms of perception of mobile Internet speed and perception of reputation/image.

In 2023, MTS Belarus continued to develop cloud services; proceeds at the end of 2023 increased by 38 % as compared to 2022 and reached RUB 3.7 million.

MTS Belarus provides a set of services that are in demand on the market: Iaas, Saas, Paas, Pams, object storage and information security services. In 2024, the company will go on developing services with a focus on information security and intends to enter the market with products for small and medium businesses.

In 2023, MTS continued to expand access to 4G network services throughout Belarus together with the infrastructure operator beCloud. In total, in 2023, the LTE network in Belarus increased by 261 new base stations: 208 — in the 800 MHz range, 36 — in the 1,800 MHz range and 17 — in the 2,600 MHz range.

Also, in 2023, MTS Belarus continued to expand its network coverage for the Internet of Things and networks in the 3G standard. Minsk, regional centers and cities/towns with a population exceeding 50 thousand people were provided with NB-IoT communication. In 2023, 428 NB IoT BSs, 139 3G BSs in the 2,100 MHz range and 89 BSs in the 900 MHz range were commissioned. Besides, MTS, together with the operator A1 UE, commissioned 258 BSs to improve the 3G coverage in rural areas using RAN-Sharing technology in the 900 MHz range.

Fintech

The Bank’s record-setting results against the backdrop of strong portfolio growth dynamics, diversification of revenue sources and efficiency

High level of creditworthiness confirmed by the leading rating agencies

Retail

The revenue of the retail segment of MTS Group business within 2023 increased by 20.5% to RUB 68.6 billion, OIBDA increased by 18.4% to RUB 9.8 billion on the background of recovery of sales and development of services. The number of own and partner outlets of MTS amounted to 4,478 as of the end of 2023.

In December 2023 MTS announced plans to open thousands of expert stores. The updated retail concept is focused on the customer service and digital products. The outlets will be selling smartphones, TV sets and set-top boxes, goods for smart home, headphones, speakers, and also MTS digital products. Apart from usual consultants, the expert stores staff includes experts on MTS ecosystem products, as well as consultants that specialize in individual brands. Another feature of the new store concept was the designed space in the format of the designer, where all equipment and zoning may be rebuilt without significant efforts and costs.

Media

MWS (MTS Web Services)

MWS is a provider rendering cloud services featuring: virtual infrastructure, object storage, virtual desktops, information security services, business apps and network services. More than 5,000 customers use the provider’s services. MWS physical infrastructure includes 15 own data centers. All of them are connected by the MTS backbone network 280 thousand km long (FOCL).

The MWS virtual infrastructure includes 14 availability zones based on individual data centers of MTS and partners, thus ensuring minimal cross network delays and a high level of availability for clients.

The MWS virtual infrastructure complies with the requirements of the Russian law, is certified, can be used in organizations of various scale of operations, and any personal data and government information systems can be transferred to it.

MWS availability zones are deployed in Moscow and the Moscow region, St. Petersburg and the Leningrad region, Kazan, Novosibirsk and Vladivostok.

In Q4 2023 MWS revenue grew by 64% year-on-year. One of the provider’s fastest growing services in terms of sales was office software in the cloud. The company’s revenue from its provision increased 12-fold in Q4 2023. Over the same period of time, spending of the provider’s clients on MTS private clouds increased by 5.6 times, and revenue from providing data backup services in virtual infrastructure increased by 2.4 times. The spending of MWS clients on virtual workplaces and SD-WAN have slightly more than doubled.

In December 2023, MWS launched a new partnership program for system integrators and companies providing IT consulting and outsourcing services. There are plans to unite more than 100 of the country’s leading integrators, providing services to clients in more than 20 sectors of the economy by 2025. These are integrators working in retail and e-commerce, fintech, insurance, manufacturing, mining, transport, logistics, power engineering, media, science, education and other industries.

Business interest in information security services in the MTS cloud is growing. Over the year, sales of MWS products for protection against DDoS attacks have doubled. Revenue from the implementation of the provider’s cybersecurity operations center (SOC) increased by 1.75 times, and revenue from the web application firewall service (WAF) — by 1.6 times.

In January 2024, MWS announced the expansion of the list of services provided for the processing of personal data (PD) in the cloud: three data processing centers in Kazan, Novosibirsk and Vladivostok were given a certificate for compliance with the requirements of the third level of security (LS-3).

Quality and Improvement of Customer Experience and Servicing

In 2023 MTS continued development of their customer service tools with a focus on ecosystem approach, omnichannels and seamlessness of the customer experience.

Within the single customer service strategy the “Closed Circuit” project was transformed: the customer issue is solved without delay, and complicated issues are escalated to the dedicated specialized employees. Quick solving of issues is one of the key focuses for customer service development in MTS. As a result, tNPS¹ increased by 8 percentage points, and return calls to the contact center dropped by 2 percentage points.

¹ Transactional Net Promoter Score.

The company continued increasing the effectiveness of sales in the contact center and developing new channels — sales of operators in the chat and sales using artificial intelligence during the call. In 2023 they sold 40% more services and plans to the mobile communication customers.

The quality of ecosystem digital products service increased significantly. The knowledge base was improved. Now the procedures of all products have similar structure, and the manuals for the operators became more understandable. tNPS of digital products support year-on-year increased by 6 percentage point.

In the area of mobile customer service in 2023 we opened the contact center with 100% of remote employees.

Voice bot

Replication over new areas: the chat is built into KION, Music, LIVE and Stroki apps on support.mts.ru page and in apps, a separate team was created that supports this channel.

Recognition models were updated, and the quality of the used voice was improved, the hybrid recognition pilot was launched.

• The traffic processed by the bot increased by more than 60%.
• The share of operator transfers reduced by 35%.
• Around 70% of the transferred information is useful for the operator, and its use makes it possible for the operator to reduce the average time of service and to increase tNPS.

Knowledge management system (KMS)

Search and interactive content were improved. The growth of the level of employee satisfaction with the product (NSAT) was 12 percentage points. GenAI is being introduced in the KMS in order to test how the search for the required information can be accelerated, and high quality articles may be written.

Speech analytics

The share of analyzed conversations increased from 20 to 100%, the analysis of all ecosystem products and contacts in the MTS outlets was connected. Active usage of the speech analytics made it possible to improve the operators’ tNPS.

In 2023 the basic functionality was implemented for migration of speech analytics from MTS AIC to the internal solution. Within the use of the speech analytics technology, smart integral assessment of the operators’ work was developed and replicated, which was made it possible to differentiate the approaches to quality audit and employee development.

The service quality assessment was launched in MTS outlets using video monitoring. The pilot launch of speech analytics was completed in 32 retail outlets. Service satisfaction increased 3.4 percentage points vs 2022. In 2024 it is planned to develop the speech analytics tools for quality control, and to finalize My MTS and train customers on self-service in this channel,

Automation of processes for solving technical issues of customers for home services for Contact Centers

Transfer to interactive scenarios of service in the same software — Inetcore. A new tool makes it possible to effectively change the wordings and logics of answers, to add new steps. The parameters of the first line of support improved significantly: -17% length of consultation, +5% solved issues. The employees also appreciated the new tools: the level of satisfaction (NSAT) was 73%, and the novices reach the parameters of the experienced employees in a month of work (6 and more months of work).

Customer experience management system

In 2023 MTS expanded the team and tools to research the customer experience, increased the number of assessed points of contact and focused on the expert training of the Company’s employees in the sphere of customer experience management. Sixty-two successful studies of the customer journeys were completed, which significantly simplified the interaction with the products, made the interfaces clear, engaging and improved user satisfaction.

Quantitative assessment via NPS surveys (benchmarking with the competitors) and tNPS (internal measurements) makes it possible to assess the customer experience in their products versus the competitors and the performance of the product teams, and to prioritize the areas of development. The internal survey module product was finalized, which makes it possible to assess the customer experience within the digital-showcases of the ecosystem.

The expansion of coverage by the products focused on feedback collection continued. Thirty-four points of contact with the customer were launched, which is 20 percentage points higher than in 2022. This includes 21 products in 23 showcases of the mobile app and websites, and 11 surveys of the business processes via IVR calling. More than 200 email surveys were sent.

MVP of the project for assessment of the customer experience after the customer service in the call center was launched via ML-model¹. High accuracy of actual customer experience forecasting was obtained.

¹ ML — Machine Learning.

MTS transferred the delivery of communications to a new platform of its own development, which made it possible to more effectively communicate with the customer information flow and to analyze the entire information flow. New solutions made it possible to improve SMS delivery to the numbers of other operators up to 87%.

The company successfully launched and uses the updated system for automated testing of plans and services. The new system helped to increase the volume of the tested processes at the moment of peak productivity by more than 3 times, and the volume of the tested products continues growing. The monitoring system is being used successfully and continues its development, helping to identify failures in the operation of plans and services prior to their launch for their unimpeded use by the customers.

In 2023 the alpha- and beta-testing processes were relaunched, which became mandatory for launching new MTS products. Besides, the stage of new product testing by the Company’s top management was introduced as a binding one. The specified steps formed a comprehensive testing cycle aimed at improving the quality standards.

In 2023 together with the product teams we focused on introduction of the unified system of coordinates for methods of KPI calculation for the following verticals: KION, Bank, Entertainment, Cloud MTS, MTT, Gulfstream and others, and also for the partner services and ecosystem product modules. This made it possible to perform the comprehensive assessment of the customer quality based on different metrics.

Digital products for the disabled people

MTS developed a guide on accessibility and a training course for the experts in the fields of development, design and testing. Development of this area will make it possible to expand the audience of the MTS services and products and to make the customer experience seamless for all categories of users.

In 2023 the key scenarios of availability of 132 products were presented on the health dashboards. Main scenarios: tracking of authorization, payment, website opening success. Currently the active process of tracked metrics tuning is in progress, which will be used to measure actual availability, and the incident management is being worked on, in order for the corresponding team to effectively record the incidents using the monitoring events. A complex of actions will make it possible to see the broad picture of reliability, to timely respond to abnormal situations and to improve the product quality.

MTS ID

• 0.01% — level of technical errors in entry by all products of the ecosystem connected to MTS ID.
• 92% — share of seamless authentications to the total volume of authentications.
• 0.38% (with permissible value of 0.52%) — level of incidence per 10 thousand users (percentage ratio of the number of incidents to the active unique users for the reporting period).
• In December 2023 MTS ID received the national bank award as the best solution for online identification of the customers by the bank.
• In January 2024 MTS received the state accreditation to work with biometric data.

Number of authentications for 2023

	Q1	Q2	Q3/th>	Q4
Total entries (seamless + chain)1, million units	393.4	434.3	441.1	471.4
Chain entries, million units	35.8	39.1	39.3	41.4
Unique users, million people	15.7	15.9	16.6	17.4

¹ Data for seamless + chain entries were collected from August 1, 2023, therefore the data for Q1-3 2023 were forecast retrospectively based on “Chain Entries” data.

Big Data

In 2023, Big Data went on creating and developing strategic platforms based on big data and AI.

New platforms

Dynamic Pricing is a dynamic and personalized pricing platform that supports various strategies for optimizing target metrics. A successful pilot of the transition from manual to dynamic pricing was carried out using the platform in sales offices and online store in the Volga Region (+9 % GM¹, with stable turnover). The platform is an enabler² for a more flexible and quick change of business strategy (for example, choosing a pricing strategy: increasing marginality / turnover / stock sales + strategy diversification by locations and categories), as well as a basic element of price personalization. Algorithms of optimizing data plans for telecom customers (Next Best Tariff) were transferred to the platform: personalized dynamic ML pricing (+16 % CTR³ and + 20 % ARPU), after that — optimization of the telecom product content.

¹ Gross Margin

² Enabler — element of backlog that expands the Architectural Band of the developed solution or improve the effectiveness of the value development flow.

³ Click-Through-Rate

DataOPS is a platform of services for working with big data. The move away from vendor-lock of large IT platforms was completed (TCO reduction and digital independence), more than 230 internal products were activated, more than 3,900 active users per month, ITSM processes for data quality control were configured.

Development of current platforms

Recommender Systems (RecSys). The focus in 2023 was on scaling recommendations across the entire MTS ecosystem. Four marts of the MTS online store were activated (+2.3 % increase in conversion into purchase). Cashback For You mart was integrated (+50 % CTR). Recommendations in already activated services (KION, Lines, MTS Bank) were expanded and optimized — 50+ AB tests of new versions, 17 of them were successful.

Scoring (Financial and Antifraud). The development of data quality and algorithms made it possible to multiply the effect on proceeds in 2023. Using the DataOPS platform, we improved the quality and availability of scoring services (up to 99.95 %).

In 2023, the following was implemented for the Marketer:

• coverage of non-subscribers of the ecosystem was increased (+40 % coverage, +30 mln profiles, ~85 % accuracy according to Ya.Audience),
• the functionality of the Marketer’s personal account was expanded and AutoLAL algorithms were improved, which made it possible to increase the number of segments collected without the involvement of analysts by 1.5 times,
• due to the development of Antibot/Antifrod models, it was possible to reduce the level of fraud in web/inn_app/video campaigns by 2 times.

FinTech

For SME, targeted promotion of FinTech products was expanded by 10 times. The Next Best Offering algorithm was introduced to prioritize communications using Big Data — the volume of actual communications was expanded by 20 %, provided that the conversion level was maintained. The insurance mart was optimized (data auto-filling, the pool of insurance partners and products was expanded), which allowed us to increase the number of insurance customers to 65+ thousand.

Telecom

The integration of big data-based ML algorithms into telecom business development processes is ongoing.

We consolidated and improved network infrastructure load forecasts using Big Data (reduced the median error by 25 % to 4.5 p.p.) within the framework of Smart Rollout, a unified decision support system. We optimized the operation of profitability prediction models for coverage construction and reduced the median error by 4 p.p.

We increased sales of the convergent in retail by more than 2 times due to targeted engagement of mobile customers with PTV.

By accelerating data acquisition and the operation of ML algorithms, we reduced the volume of spam phone numbers breaking through to the MTS base by more than 3 times. The number of recognized spam phone numbers increased by 10 times due to the processing of new patterns and texts.

We launched the transformation of our own retail using Big Data technology and algorithms. The project includes improving logistics, pricing, CVM¹, HR and operational analytics processes in terms of forecasting and expanding demand, as well as optimizing manual or outdated algorithms and systems. For example, the following was successfully implemented in the project in 2023: recommendations on four marts of the online store (increased conversion to add to cart (+1.3 %) and to purchase (+2.3 %)) and pricing pilots (+9 % GM, with stable turnover).

¹ Customer Value Management — approach to management of the customer’s value journey that starts from the first contact with the product and ends with the last interaction with the company.

Artificial Intelligence

AI Vertical (AI) is a subsidiary of MTS and the MTS ecosystem competence center in the field of artificial intelligence. Founded in 2017. AI experts develop solutions based on computer vision, natural language processing and synthesis, generative AI for the MTS ecosystem, as well as for external customers.

AI is actively developing its own expert knowledge in the field of artificial intelligence. In 2023, the company built up a fundamental research team, which consists of the leading Russian scientists in the field of AI with work experience at Huawei, Toyota, Lyft, Intel and Samsung. The department’s tasks include searching, developing and implementing innovative approaches in the field of machine learning, preparing articles for Tier 1¹ international conferences, training large language models and participating in artificial intelligence competitions.

¹ Tier Standard is the system for certification of DPCs developed by Uptime Institute, Tier categories stand for the level of reliability and safety.

In less than a year, the research developers created a large language model for the business AI Chat, which was ranked second in the MERA¹ benchmark among Russian LLMs²; this indicates the high quality of model training and the accuracy of answering questions.

¹ Multimodal Evaluation for Russian-language Architectures — independent benchmark to assess fundamental models for the Russian language developed and supported jointly by the researchers of the industry and the academy.

² Large language model — language model with many parameters

Also in 2023, the company launched a new product — WordPulse — an analytics service for voice and text communication based on neural networks.

At year-end, AI implemented more than 10 projects for the MTS ecosystem and external customers. Among other things, the company’s experts developed AI functions for the Defender service, which allow getting a transcription of the dialogue with spammers. A bot for the Attendant service was created. It answers the phone call if the subscriber is busy, distributes calls into categories (family, colleagues, spam) and sends a transcript of the dialogue. Several different voices, including neutral female and male, cheeky male and cheerful female voices, were created specifically for this bot based on the Audiogram speech synthesis and recognition platform. In addition, the work was started to replace the third-party solution used to process communications with customers of the MTS ecosystem with WordPulse.

AI also implemented a number of projects based on multimodal and generative networks.

A computer code autocompletion system was created for the MTS Platform service. MTS Travel introduces the search for objects in photos of hotel rooms, which helps fill out the hotel cards faster and more efficiently. Avito is testing a system based on generative AI and Audiogram, which identifies calls from scammers and hangs up.

In 2023, AI continued to develop its investment activities. The company acquired a 16 % stake in PrimoRPA, a Russian developer of the PrimoRPA platform for robotic process automation (RPA) in procurement, accounting, sales, HR and other areas. AI also bought out a 49 % stake in Infomatika, a company engaged, inter alia, in the development and production of access control and ticketing management system and turnstiles.

Besides, AI carried out two acceleration programs: for startups developing Metaverse technology and for mature companies creating products and solutions in the field of generative artificial intelligence. Both programs received over 600 applications from more than 30 countries. 10 companies were selected for each track. The acceleration program mentors were experts with work experience at Google, Microsoft, NetEase, Tencent, CBI, and world-famous game studios.

As a result of the Metaverse accelerator, two startups launched pilot projects with MTS PJSC: Phygital implementing a project for WASD, Sporta — for GoGym. Upon completion of the program for the development of generative AI technology, three companies launched pilots with MTS: DeepReel — in the field of cybersecurity, AutoFAQ — for a knowledge management system, Brainfeed — for MTS Your Business.

In 2023, AI employees won a number of prestigious international artificial intelligence competitions. Ammar Ali, Senior Research Developer, won gold in the Image Matching Challenge by Google, he also took three prizes in the artificial intelligence competition as part of the AI Journey. Ali Aliyev, Senior ML Developer, was ranked third at VoxSRC, one of the most prestigious competitions in voice biometrics. At RuSentNE-2023, AI developers were ranked first and third after proposing new methods for analyzing the sentiment of named entities in texts in Russian.