MTS Russia plans $2.5 billion Capex for 2013, despite cut in revenue target

Russian telecom operator MTS on Tuesday said its Capex (capital spending) for 2013 will be $2.5 billion (RUB 80 billion) or roughly 20 percent of sales.

The Capex focus of MTS will be in launching LTE networks in regions throughout Russia, GPON network in Moscow and improvements in 3G networks, including expansion of IP-connected base stations and enablement of HSPA+ connectivity, said MTS in a statement.

The telecom service provider is maintaining its capital investment for the full year despite a decrease in revenue guidance. MTS now expects growth of at least 5 percent, compared to its previous 5-7 percent forecast. The revised forecast is due to due to weakening economic conditions in its main markets, MTS said.

Group Capital Expenditure

Capital expenditure for the first nine months of 2013 was RUB 43.9 billion. MTS Russia invested in 2G and 3G networks in Russia, roll out of LTE/4G networks throughout Russia, the ongoing deployment of GPON in Moscow and modernization of regional fixed line networks.

Meanwhile, MTS, Russia’s top mobile phone operator, reported a 14 percent year-on-year drop in its third-quarter net profit to $556.2 million.

MTS, which in Russia is ahead of rivals Megafon and Vimpelcom by subscribers, said its third-quarter revenues rose 4 percent to $3.17 billion.

MTS, which has 100 million mobile subscribers, said the lack of a 3G mobile license in Ukraine, its second-biggest market after Russia, hampered growth.

Reuters reported that Vimpelcom, which has a large presence overseas, recently said its third-quarter sales fell 1 percent, hit by competition and tougher regulations.

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