The Long Case for Russia's Mobile Telesystems

Although in Q4 2008, Mobile Telesystems [MTS] (MBT) suffered a disastrous $794.8 million foreign exchange loss to reflect book value of the company’s foreign-denominated debt due to the weak ruble, there are plenty of signs Russia’s largest mobile operator is worth investing in now. Revenue grew 4.0% to $2.42 billion from $2.33 billion a year ago, which is healthy in the current economic climate. Taking into account that the ruble declined by 16% against the dollar in the last three months of 2008, this is a signal that Mobile Telesystems is a very robust play indeed.

MTS operates GSM based mobile services across six countries within the CIS (Commonwealth of Independent States); Russia, Ukraine, Uzbekistan, Armenia, Turkmenistan and Belarus. It also has interests in foreign mobile operations in Daghestan and India, with more on this later. Within Russia, it has the highest number of post paid customers, as it looks to serve higher end users.