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2020 Outlook

Group Revenue:

For 2020, MTS forecasts around 3% revenue growth, based on the following factors:

  • A rational competitive environment in Russia;
  • Evolving market pricing dynamics;
  • Rising data consumption and weaker voice usage;
  • Possible changes to consumption of roaming services; and
  • Potential macroeconomic and regulatory developments.

Group Adjusted OIBDA:

MTS forecasts Group OIBDA in 2020 to be roughly flat, with the aim to achieve slightly positive growth, taking into consideration the following factors:

  • Market sentiment and prospective growth in usage of high-value products;
  • Reducing SIM card sales and improving subscriber churn;
  • Ongoing steps to optimize the Group’s retail footprint and associated costs;
  • A high base from a positive one-off in Q1 2019;
  • Higher labor costs in new business segments;
  • Possible changes to consumption of roaming services; and
  • Potential macroeconomic and regulatory developments.

Group CAPEX:

FY2020 CAPEX spending is estimated to be around RUB 90 bn, including required investments under the Yarovaya Law (see below), due to a number of factors:

  • Further incremental improvements and enhancements to LTE networks;
  • Continued investment in digital products and services;
  • Potential broader macroeconomic developments including FX volatility;
  • Development of commercial 5G solutions and introduction into Russian market; and
  • Implementation of infrastructure and spectrum sharing projects within Russia.

Yarovaya Law

Under Russian Federal Law No 374-FZ enacted July 6, 2016 (also known as the “Yarovaya Law”), which governs data storage requirements, telecom operators are required to store voice and SMS communications, as well as Internet traffic for a period of up to six months. MTS forecasts the additional investment in data storage systems necessary to comply with the Yarovaya law at approximately RUB 50 bn over the five-year period H2 2018 through H1 2023 inclusive.




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