Russian incumbent carrier MTS has swung back to a $381 million (€235.6 million) Q1 profit, due to healthy subscriber growth and successful debt reduction measures.
Revenue grew 23.2% year-on-year to $2.61 billion, MTS said, and the company ended the quarter with $710 million in free cash flow.
MTS CEO Mikhail Shamolin said the company experienced growth in each of its markets of operation.
“Increasing usage, greater adoption of data products, subscriber additions and our extension into new products and services continue to support our growth,” he said.
During the quarter a number of moves were made to reduce MTS' debt, including voluntary repayment of over €500 million worth of loans, the negotiation of interest reduction on further credit facilities, and an additional 22 billion ruble (€579.6 million) loan.
In its core market of Russia, ARPU at 236.7 rubles decreased quarter-on-quarter but improved year-on-year. MOU and churn followed a similar trend, with MOU at 211 minutes, and churn at 10.4%. Overall revenue from Russia grew 13.6%.
Revenue from Turkmenistan surged 48.6% in the quarter, while Ukraine and Uzbekistan grew 2.6% and 2.8% respectively.
However, the carrier slashed its Capex during the period, investing just 8.2% of revenues in infrastructure in Russia, and 23.1% in Uzbekistan – a massive fall from the 98% figure it spent in that country in 4Q09.
Analysts had, on average, expected MTS to report net profits of just $357 million, Reuters said.