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On track for growth

Following 25 years of expansion, evolution and innovation, MTS stands today as one of the leading telecommunications groups, offering a broad range of communications services – mobile, fixed and beyond. Explore the key milestones of our history below and see how it all began.

Building the leading national mobile operator

MTS was established in October 1993 by Moscow City Telephone Network (MGTS according to its Russian acronym), T-Mobile Deutschland GmbH (T-Mobile), an affiliate of Deutsche Telekom AG, Siemens AG (Siemens) and several other shareholders. In late 1996, Sistema PJSFC , publicly-traded diversified holding company in Russia and the CIS, acquired a majority stake in MTS and has remained the primary owner ever since. MTS was the first company to launch GSM services in the Moscow region in 1994. In subsequent years, MTS has seen rapid expansion in Russia, largely through the acquisition of smaller independent players, and has fast become the leading national mobile operator.

Expanding beyond the national borders

In 2000, MTS launched its IPO on the New York Stock Exchange, raising over USD 350 mln to fund regional expansion in Russia and the near abroad. Between 2002 and 2008, the company entered several neighboring CIS countries. MTS initiated its international expansion in 2002 through the establishment of Mobile TeleSystems LLC, a joint venture with Beltelecom, the national fixed-line operator in Belarus. In 2003, MTS acquired the leading operator UMC in Ukraine, the biggest CIS market outside of Russia, and entered Uzbekistan a year later. A further acquisition followed in 2005, when MTS acquired Barash Communications Technology, the number one operator in Turkmenistan. In 2007, MTS continued its international expansion through the acquisition of the leading mobile operator in Armenia, K-Telecom.

Evolving into an integrated mobile & fixed telco

With mobile penetration well in excess of 100%, MTS began to shift its corporate strategy from one of acquisition to retention at the end of 2008. This was achieved by developing its proprietary distribution channels to engage customers more effectively. A number of acquisitions on national and local level allowed MTS to quickly expand its mono-brand retail chain.

In 2009, MTS entered the fixed market through the acquisition of Comstar, one of the Russia’s leading fixed-line operators. The acquisition formed part of MTS’ 3i Strategy, which called for a focus on integration, the Internet, and innovation to enhance its leadership in the telecommunications space. The acquisition opened access to important growth markets in commercial and residential broadband and enabled the Group to realize valuable synergies in capital and operational expenditures. It also helped provide a foundation for the development of effective content platforms and services.

In 2011, as a result of a number of acquisitions, MTS gained control over MGTS , the incumbent fixed-line telecommunications operator with “last mile” access to approximately 95% of Moscow households and one of the largest local wire communications operators in Europe. Over the following few years, MTS bought several regional internet and cable TV providers across Russia through its efforts to opportunistically develop into a fully integrated telecommunications operator in certain regions in Russia.

Looking for growth beyond telecom

The acquisition of a stake in MTS Bank (previously MBRD) in 2013 marked the beginning of a new chapter in MTS’ evolution. The company started to expand into complementary businesses, look for revenue streams beyond telecom, and differentiate its portfolio by providing unique services to enhance digital user experience. As a firm believer in the breadth and scale of opportunities that FinTech innovation can open up, MTS partnered with MTS Bank to launch MTS Money, a consumer finance project based on a profit-sharing agreement.

This new strategic approach was reflected in the evolution of the Company’s 3D Strategy – Data, Differentiation and Dividends – presented in 2014. In line with the strategy, MTS acquired a 10.82% stake in OZON Holdings (OZON), the leading Russian e-commerce company. The acquisition provided exclusive access to the company’s sales channels for MTS’s products and services.

In 2015, MTS acquired NVision Group JSC , the developer and owner of the MTS billing system and one of the largest system integrators and complex IT solutions providers in Russia. Through this transaction, we have obtained proprietary rights over our billing systems, which allowed us to reduce the time-to-market for new products and better manage our billing and IT-related expenses. We entered into the promising and fast-growing market for IT services, IT consulting and systems integration.

Pioneering innovation and digitizing business today

Today, being the leading telecommunications group in Russia and the CIS, MTS is shifting from legacy infrastructure towards an increasingly agile organization that delivers cutting-edge services. The company continues to differentiate its business through digital in line with its modified 3D Strategy: Data. Digital. Dividends. Digital means the incorporation of digital technologies into our operations and further expansion in new other areas beyond telecom such as FinTech, Internet of Things, Big Data, systems integration, OTT, e-Health, e-Sport, cybersecurity, Clouds, and e-commerce.

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