Morningstar Rating

Stock Research and Analysis

by Allan C. Nichols, CFA

Bulls Say

MTS owns a network quality advantage over VimpelCom in virtually all of its key markets. The firm has faster uplink and download data speeds, which has translated into lower churn rates.
While mobile penetration rates are extremely high because of multiple SIM cards, smartphone penetration is still less than 30%.
There are no handset subsidies in Russia. While this has slowed the sales of high-tier handsets such as the iPhone, it is better for long-term margins. Read more 

Bears Say

With MegaFon and VimpelCom co-owning Euroset, MTS could get squeezed in a key distribution channel.
Geopolitical concerns, such as Russia's conflict with Ukraine, can have a damaging effect of the share price appreciation prospects for MTS and its Russian peers. In August 2014, MTS lowered its fiscal year guidance due to a slowdown in Ukraine.
MegaFon has been extremely aggressive in its attempts to steal market share from MTS over the past couple of years. While we expect MegaFon to scale back and focus on profitability, it remains a major X factor in the industry. Read more 

Management

Standard & Poor's rated MTS as Russia's most transparent company. Sistema, the largest non-natural-resources company in Russia, owns 53% of the shares. In March 2011, Andrei Dubovskov was appointed president and CEO. He was the head of business   Read more 

Profile

Mobile TeleSystems is the leading mobile operator in Russia and the Commonwealth of Independent States, with more than 100 million mobile subscribers throughout five countries.  Read more 

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