MTS Continues Corporate Transformation
MOSCOW, Russia – Mobile TeleSystems Public Joint Stock Company (“MTS” or “the Company”) (MOEX: MTSS), a digital ecosystem, announces its transformation into a holding company, with its businesses being spun off into separate legal entities.
MTS’s non-telecom businesses now account for almost half (45%) of the Group’s revenue. The establishment of separate legal entities will enhance transparency of the Company’s operations, enable faster decision-making in individual businesses and drive a sharper investment focus in a high-key-rate environment.
While MTS will focus on the telecom business, non-telecom businesses will be structured as separate companies under the management of a new legal entity, MTS Ecosystem, which will be a 100% subsidiary of MTS, although it will have a great deal of operational independence.
In order to reflect the ongoing changes, Inessa Galaktionova, former First Vice President for the telecom business, has been appointed as the CEO to lead MTS.
Rovshan Aliyev, who has extensive experience in establishing effective corporate governance systems and taking assets public, will be appointed as the CEO of MTS Ecosystem.
To harmonize the operations of all Group businesses and manage the transformation process, the Board of Directors will be granted new powers and will take on a more active role in the Company’s operations.
In this regard, the President of MTS, Vyacheslav Nikolaev, will take over as Chairman of the Board of Directors, and the position of MTS President will be abolished.
A transformation committee was formed under the Board of Directors that consists of members of the Board of Directors along with the heads of Group businesses.
“MTS’s key objective in the context of tight monetary policy will be to reduce its debt position over the coming year. In 2025, we plan to stay away from cost-intensive M&A deals.
In order to unlock shareholder value, we will continue with the ecosystem transformation that began with the IPO of our banking business and the establishment of a media holding company.
We can see the effectiveness of this approach and intend to structure other business verticals in a similar way, creating separate legal entities that will interact with each other on market terms and will be able to raise external capital.
In particular, we plan to combine all the Group’s IT businesses (MTS Digital, MTS AI, MTS Big Data and CloudMTS) into a single vertical under the MTS Web Services (MWS) banner, which will eliminate a number of duplicate functions and enable us, among other things, to improve the efficiency of IT spending and receive additional revenue from the sale of IT solutions to the external market.
We are also reducing investments and discontinuing the development of inefficient business streams (for example, MTS Auto and MTS Smart Home) whose margins and growth potential are not aligned with the Group’s strategy. We are going to reduce the number of experimental and high-risk investments we make until the macroeconomic environment is more favorable. At the same time, we will continue making focused investments in R&D, which are essential for a tech company’s growth.
We continue to digitalize and improve the efficiency of the Company’s business processes. At the same time, we are not planning any large-scale staff reductions and expect optimization to affect less than 2% of the Group’s employees.
We predict that the measures taken will enable us to reduce general and administrative expenses thanks to more efficient cost management,” said Mr. Nikolaev, Chairman of MTS’s Board of Directors.
* * *
For further information, please contact in Moscow:
Investor Relations Department
Mobile TeleSystems Public Joint Stock Company
Tel: +7 495 223 2025
E-mail: ir@mts.ru
* * *
Mobile TeleSystems Public Joint Stock Company (“MTS” – MOEX: MTSS) is Russia’s ecosystem providing network-native digital services and largest mobile operator. The company offers a full range of solutions for consumers and business customers across wireless and wireline connectivity; over-the-top, linear, and satellite television; digital-first banking and financial services; as well as unified communications, cloud computing and IoT. There are more than 87 million mobile subscribers using MTS services across the company’s operations in Russia and Belarus, including more than 82 million subscribers in Russia alone. In addition, MTS has a nationwide network of more than 4,200 owned and franchised retail outlets in Russia, and provides nearly 10.7 million clients with broadband, TV, and/or fixed-line telephone connectivity, over 14 million users – with OTT and pay TV services. The number of ecosystem clients exceeds 16.8 million. MTS’s shares are listed on the Moscow Exchange under the ticker MTSS. For more information, please visit the company’s Investor Relations website at ir.mts.ru.
* * *