MTS claims M2M lead in Russia; reveals SEC seeks information on Uzbekistan

Russian operator Mobile TeleSystems (MTS) said it provided just over half of all machine-to-machine (M2M) connections in the country by the end of 2013, and that total connections grew 40 per cent year on year.

MTS said the number of M2M connections on its network grew 450,000 in the second half of 2013, leaving it with a total of 2.5 million M2M SIM connections by end-December. Total connections in Russia hit 4.8 million in 2013, leaving MTS' share of the market at 52 per cent.

Transport, specifically fleet management, accounts for the bulk of MTS' M2M services, with at least a million SIM connections--or 41 per cent of the company's total--at end-2013. Security systems are the second-largest market for the operator, comprising 500,000 connections and accounting for 20 per cent of the total.

Other sectors include ATMs and payment terminals, and connections for oil and gas companies--which took a 12 per cent share apiece--utilities companies (10 per cent), healthcare (3 per cent), and consumer electronics (1 per cent).

MTS states utilities and healthcare were the fastest-growing sectors in 2013, and tipped consumer electronics as the segment with the greatest growth potential, as sales of trackers, navigation devices, car insurance products, and smartphone applications grow.

The operator separately revealed that the U.S. Securities and Exchange Commission (SEC) has requested access to documents relating to its now defunct business in Uzbekistan.

In its fourth quarter 2013 earnings release, MTS said the SEC has asked for the information in relation to "investigations into the activities of unaffiliated parties."

The operator is the third to receive requests from the SEC for access to documents in the past week, after VimpelCom and TeliaSonera were also contacted by the U.S. authority. MTS had its Uzbekistan operating licence cancelled in 2012, in a move that cost it an estimated €792 million.

MTS' earnings, meanwhile, beat the expectations of analysts polled by Reuters. The group increased net income 16.2 per cent year on year to 19.7 billion rubles (€392 million/$546 million) in the fourth quarter, some 5 billion rubles higher than the average predicted by analysts. Full-year net income was up 21.8 per cent to 79.8 billion rubles.

The operator told Reuters it is sticking to 2014 forecasts for the time being, but noted the imposition of trade sanctions on Russia following its annexing of Crimea from Ukraine could have an impact on its future earnings.

(Conversion rate: 1 ruble = €0.0199/$0.0277)

For more:
- see MTS' M2M figures
- see the company's earnings release
- see this Reuters article

Related Articles:
TeliaSonera ordered to provide financial cover for Uzbekistan investigation
TeliaSonera second operator to face Dutch probe into Uzbekistan business
VimpelCom faces criminal investigation over Uzbekistan operations
VimpelCom posts loss over Ukraine; Hutchison offers concessions in O2 Ireland deal

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