Valeriy Ermakov, Director, Regional Operations:
"Today, we serve nearly 63 million subscribers. This is a great number of people who trust in us and rely on us. Now their work, relationships and other aspects of their lives are in one way or another related to MegaFon. We act as intermediaries between people by providing services to them -- and sometimes vital services. While this is a very considerable responsibility, at the same time I am very inspired by the understanding of this.”
Today, MegaFon is one of the three largest mobile operators in Russia. Moreover, we are the only company that launched its own network, providing a full range of mobile services across the country. In addition, subsidiaries of MegaFon work in Tajikistan, Abkhazia and South Ossetia.
In June 2010, MegaFon acquired a 100% stake in the company Synterra that allowed us to strengthen our own network infrastructure and our position in the spheres of telecommunications, fixed and mobile broadband Internet access (BBA), and converged services.
Facts and figures:
In November 2011, MegaFon signed a partnership agreement with Scartel for the joint development of fourth generation networks based on LTE (Long Term Evolution) technology in Russia.
Due to a successful partnership project lead by MegaFon, since Autumn 2011, the two operators worked jointly with state authorities and successfully provided mobile communication access along the Cupid highway (Chita - Khabarovsk), which is one of the longest roads in Russia at 2165 km.
In 2011, the number of MegaFon subscribers grew by 9.6% to 62.8 million people.
The subscriber base of MegaFon s subsidiary MegaFon - Tajikistan, currently includes more than one million users.
As estimated by Ericsson experts, at the end of 2011 the global number of mobile subscribers reached nearly 4 billion people, and the number of SIM-cards sold reached 6 billion.
Ericsson estimates that the annual number of mobile users grows by about 13%, lead by India and China. The remainder of the top five countries with the highest increase in the number of mobile phone users are Brazil, Indonesia and Bangladesh.
Research by Gartner Inc. analysts forecast that the global market size of mobile communications and data transfer will exceed USD 1 trillion by 2014.
The number of active subscribers of our company now exceeds 63 million people. However, the attractiveness of the MegaFon brand is not only explained by the fact that there are no other companies that match us in terms of coverage in Russia. In line with our motto "The future depends on you", we try to always be one step ahead of the market, our competitors and the desires of our customers.
MegaFon is traditionally known as the company that introduces the most advanced technology. Our company became the first all-Russian mobile operator in GSM 900/1800. Then, we were the first in Russia to launch into service for commercial use the new third generation network 3G - in the most promising communication standard, UMTS, which makes the mobile Internet a convenient and effective tool for users. It helped us become leaders in the total number of users of third generation networks, as well as the volume of revenue from services that are sold through them. Today, MegaFon is the first operator in Russia that has successfully tested an experimental network of the 4G, LTE protocol. We launched it into service in spring 2012, first in the Moscow region only. By autumn 2012, 4G networks have been rolled out in the regions where more than 20% of the population of Russia live (Moscow, Moscow Region, Novosibirsk, Samara, Vladivostok, Ufa, Krasnodar Territory, Sochi, Saint-Petersburg, Kazan, Kostroma). By the end of 2012 this indicator will grow to 30%. In absolute figures, MegaFon plans to provide 4 G connection to 100 000 customers in Russia.
The development of 3G and 4G is a priority for the company in the near future. MegaFon does not pause in the development of new technologies and markets. Eighteen months ago, we became the first operator in Russia to put into operation our network that supports innovative HD-voice technology. It provides high quality voice and greatly increases the clarity of sound.
In the summer of 2011, we acquired a 100% stake in the group of companies NetByNet, which allowed us to enter the market of fixed broadband, digital TV and IP-telephony in Moscow and in the Moscow, Belgorod, Voronezh, Kursk, Lipetsk and Orel regions. In addition, last year we seriously stepped up our position in the market by providing broadband Internet access in the Volga region and the Far East, as a result of our acquisition of the companies Luchshe.Net, Telecom Discovery and ChEbNet.
At the end of 2011, MegaFon created MegaLabs, which is a united center for innovation and the operational launch of additional services. As a wholly owned subsidiary, MegaLabs will help us to gain leadership in markets that are aligned with an operator: content and media, mobile finance, mobile advertising, cloud solutions, M2M, e-government, m-health and others. At the same time, MegaLabs is a platform for MegaFon experimental development.
Last year, we achieved strong financial results, and demonstrated steady revenue growth in all areas of our business. For example, consolidated revenue increased by 12.6% compared to 2010 and reached 242,608 million rubles, and the number of mobile subscribers grew by 9.6% to 62.8 million by the end of December.
The margin of safety that MegaFon adheres to during our work, and our very conservative financial management and borrowing policies, has enabled the company to not only survive the financial crisis with confidence, but also to strengthen our position in the market and take on new challenges.
In 2009, several reputable international rating agencies increased MegaFon investment and credit ratings. For example, the international rating agency Standard & Poor's upgraded our company long-term international credit ratings from BB + positive to BBB stable. Standard & Poor's also raised the company's long-term rating on a national scale: from ruAA + to ruAAA.
The international rating agency Moody's Investors Service upgraded our international corporate rating and the probability of default rating from Ba2 to Ba1 with a "stable" outlook for MegaFon. This rating is the highest that has ever been assigned to any Russian telecommunications company.
In 2010, as a result of nationwide voting for "The No. 1 Brand in Russia – 2010", MegaFon became the winner in the “mobile operator” category. Sergei Soldatenkov,MegaFon General Director was named the best director of a telecommunication company in Russia in the annual ranking of the Top 1000 Russian Managers" In the same year, MegaFon built its Samara Data Center (DPC), for which it won the National Award “IT-leader.” The Samara Data Center became the first in Russia to be certified at the prestigious third level of reliability. Until recently, there were no centers in the country certified at even TIER I, which is the lowest level.
MegaFon received high public recognition with its announcement as a general partner and the official mobile operator of the XXII Olympic Winter Games and XI Paralympic Winter Games scheduled for 2014 in Sochi. We believe that the company's participation as a general partner will help make the Winter Olympics in Sochi the most high-tech and innovative in the game’s history. For us, the Olympic motto "Faster, Higher, Stronger!" is very suitable for MegaFon.
MegaFon is the second largest mobile operator in Russia in terms of number of subscribers and revenue, with a strong brand name and a European-level of service. But our goals and plans extend much further, because we believe it is possible to succeed only by setting truly ambitious goals.