MTS made a major purchase of telecom equipment in the first quarter

MTS increased capital expenditures by almost 30% in the first quarter due to the acceleration of purchases of telecommunications equipment

In the first quarter of this year, MTS capital expenditures increased by 27.2% compared to the same period in 2021 and amounted to 37.3 billion rubles, the company said in a message to RBC. It explains that the growth was "driven by accelerating procurement of network equipment in 2022." The bulk of this amount (99.7%) fell on Russia.

What kind of equipment and from which manufacturer the company purchased, its representative declined to comment. As two sources told RBC in the telecommunications market, in the first quarter, all major operators urgently purchased telecommunications equipment. In particular, VimpelCom (Beeline brand) received a batch of equipment worth $15 million from Huawei at the end of March. its completion was questionable.

After Russia launched a military operation in Ukraine, the United States banned high-tech exports for a number of industries and limited the supply of telecommunications equipment, semiconductors, computers and other products with special licenses. In early April, the EU introduced a ban on the supply of technologies to Russia intended for civil communication networks of organizations where the state owns 50% or more. Against the background of these measures, major suppliers of telecommunications equipment announced the suspension of work in Russia or the withdrawal from the market. Huawei did not make such statements, but stopped entering into new contracts.

Beeline received a batch of equipment from Huawei Technology and media

A Huawei representative did not comment on whether the company supplied MTS equipment in the first quarter.

What other results did MTS report on?

According to the results of the first quarter, the total revenue of MTS increased by 8.5% and amounted to 134.4 billion rubles, of which 130 billion rubles. the group has earned in Russia. OIBDA increased by 2% to RUB 56.5 billion. Net profit decreased by more than four times, to 3.9 billion rubles. The company attributed the drop in the indicator to increased financing costs in the face of a sharp increase in the key rate, as well as due to an increase in depreciation due to intensive capex. In addition, the indicator was affected by MTS investments in the first quarter in the Urent scooter rental service, the Bartello online food and beverage ordering service and the acquisition of Gulfstream Security Systems.

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Revenue from MTS communication services in Russia grew by 6.7%, to 104.8 billion rubles, the subscriber base in the first quarter amounted to 80 million customers, which is 2% more than on March 31, 2021. The revenue of MTS Bank increased by 47.7%, to 14.5 billion rubles, the revenue from sales of phones and accessories decreased by 10.7%, to 13.8 billion rubles.