The decline in mobile operator revenues has slowed

On Friday, quarterly reports of mobile operators MTS-Ukraine and Astelit were published. Although companies are still cutting revenue, the decline has slowed. This gives reason to say that the peak of the crisis has already passed. The best dynamics of changes in indicators is demonstrated by the MTS-Ukraine company, experts note. In their opinion, in the long term it can catch up with the market leader Kyivstar.

According to MTS, the revenue of the Ukrainian subsidiary in July-September compared to the same period last year decreased by 1.7%, to UAH 2.2 billion; net profit - by 45.6%, to UAH 195.8 million; OIBDA indicator by 1.9%, to UAH 1.07 billion. Compared to the second quarter of this year, revenue in national currency increased by 12.1%; net profit - by 37.5%; OIBDA - by 19.9%.

Astelit's revenue in the third quarter compared to the same period last year decreased by 27%, to $93.2 million; net loss increased by 75.6%, to $42.5 million; EBITDA decreased by 34.5%, to $7.4 million. Compared to the second quarter of this year, revenue increased by 8.5%; net profit - by 116%; EBITDA - by 221%. The company traditionally does not publish financial statements in hryvnia. But the head of the corporate relations department of Astelita, Nadezhda Lubnina, says that in hryvnia the company’s income increased by 18% compared to the third quarter, and by 11% compared to the second quarter.

The fall in operator income is a trend for the entire market: let us recall that the fall in hryvnia revenue of the market leader, the Kyivstar company, in the third quarter compared to the same period last year amounted to 13% (see Kommersant on October 30).

MTS-Ukraine compares favorably with its competitors in terms of revenue per subscriber (ARPU). In the third quarter it remained at the level of last year - 40 UAH. During this period, the ARPU of Kyivstar decreased from 47 to 42 UAH, and the ARPU of Astelit - from $4.1 to $2.6. Nadezhda Lubnina notes that in hryvnia this figure has not decreased since last year.

According to GfK Ukraine analyst Gleb Vyshlinsky, the positive dynamics of MTS-Ukraine’s ARPU is explained by the introduction of mandatory monthly payments in popular tariffs. In addition, operators began to encourage subscribers to use additional services. However, the introduction of mandatory monthly payments had a negative impact on Astelit - the number of active subscribers in the quarter decreased by 2.5% and amounted to 7.8 million (the operator’s total subscriber base increased by 0.9% quarterly and by 10.3% year-on-year , up to 11.8 million).

Experts and market participants note that of the leading “troika” operators, MTS-Ukraine and Astelit show better dynamics compared to Kyivstar. According to Gleb Vyshlinsky, with the onset of the crisis, Kyivstar, which has the positioning of a premium operator, did not take any active steps to change it. At the same time, two other operators entered the market with more advantageous offers. “However, in the short term, Kyivstar has nothing to fear, especially since the peak of the crisis has been overcome,” says Mr. Vyshlinsky. “But the subscriber base and other indicators of the two market leaders will most likely converge.” In his opinion, the only real threat to Kyivstar could be the adoption of the law on number portability (MNP), so the operator “will do everything to curb this initiative.” And Concorde Capital investment analyst Egor Samusenko predicts that in the next one and a half to two years, the profitability indicators of the two leading operators will become equal again.

Roman Kommersant-Sudolsky

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