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MTS Earnings Increase 4.5% on Russia Mobile Data Demand

Nov. 19 (Bloomberg) -- OAO Mobile TeleSystems, Russia’s largest wireless carrier, boosted third-quarter earnings as it added subscribers in Moscow and Ukraine and surpassed its main rival in data revenue.

Operating income before depreciation and amortization rose 4.5 percent from a year earlier to 46.3 billion rubles ($1.4 billion), Moscow-based MTS said today in a statement. Analysts predicted 46.1 billion rubles, the average of estimates compiled by Bloomberg. Sales climbed 4 percent to 103.4 billion rubles, compared with the average projection of 103.9 billion rubles.

MTS, controlled by billionaire Vladimir Evtushenkov, is adding subscribers by offering cheaper smartphones and contracts bundling Web service and voice. The products helped MTS’s data revenue top that of billionaire Alisher Usmanov’s OAO MegaFon.

Data revenue in Russia increased 45 percent to 12.5 billion rubles as MTS’s customers spent more browsing the Internet and sending e-mail. MegaFon boosted data revenue 24 percent in the period to 12.4 billion rubles. Billionaire Mikhail Fridman’s VimpelCom Ltd. increased third-quarter data sales in Russia 30 percent, growing from a lower base.

Sales will increase at least 5 percent this year, MTS said. It previously projected sales growth of 5 percent to 7 percent. The company cited a slowing Russian economy for the changed forecast.

MTS shares fell 0.5 percent to 327.55 rubles at 3:48 p.m. in Moscow. They had gained 34 percent this year through yesterday.

The company had 99.9 million users of as Sept. 30, up 6.3 percent from a year earlier. Customers increased 11.5 percent in Ukraine and 7.5 percent in the Moscow region, MTS said Nov. 15. Users more than doubled in Turkmenistan, where MTS resumed service last year.

The operator’s Oibda margin widened to 44.8 percent in the third quarter from 44.5 percent a year earlier. MegaFon’s Oibda margin was 45.6 percent.

To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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