Antonina Levashenko on how MTS is building its own ecosystem

MTS has long been perceived not only as a cellular operator. MTS has spread into all spheres of a user’s life and has become a full-fledged ecosystem, which surpasses even the largest Western analogues in terms of the scope and scale of services offered.

The company's growth began in 2010 with the search for new market fields that would complement mobile communications. In 2012, the Moscow Bank for Reconstruction and Development (MBRD), which was still a part of AFK Sistema, was renamed as MTS Bank and continued its development under the MTS brand. This cooperation opened up additional opportunities for promoting financial and banking services on mobile devices and in MTS retail stores. “If before the MBRD acted as a captive bank for Sistema, after its renaming it began to launch actively joint projects with MTS,” recalls Antonina Levashenko. In the same 2012, the operator and the bank issued a co-branded card allowing bonuses awarded for purchases with it to be used for paying for mobile communications. By 2015, 15% of MTS subscribers used MTS Bank’s financial services, the expert noted.

AFK Sistema’s main strategy consists in developing its subsidiaries with their subsequent listing on the stock exchange. MTS dividends are needed by AFK Sistema to pay off debt and investments, Antonina Levashenko noted. Sistema's debt to EBITDA ratio is growing; it increased from 3.41 in 2022 to 4.02 in 2023. But MTS itself also needs funds for development, the expert believes. “With almost 50% of MTS shares traded on the market, growth drivers are needed to attract shareholders. These tough conditions may also play the role of a stimulus in the development of the ecosystem.”