The Big Four mobile operators in Russia (MTS, Beeline, Rostelecom, MegaFon) showed growth in their main financial indicators in 2023, as can be seen from the companies’ reports.
MTS’s 2023 consolidated revenue increased by 13.5% to 606 billion rubles, Rostelecom increased by 13% to 707.8 billion rubles, MegaFon increased by 11.4% to 444 billion rubles, and Vimpelcom increased by 6% to 303.47 billion rubles.
Growth was also demonstrated by profit indicators such as OIBDA/EBITDA, which represents income before depreciation, revaluation of assets, taxes and interest. These metrics are often used by analysts to compare companies’ financial performance in terms of profitability.
“According to current reports, it is not that easy to compare telecom companies with each other. A good indicator for comparison is the OIBDA/EBITDA margin, which reflects the ratio of profitability to revenue. It can be used to evaluate business efficiency and the current situation in companies,” commented Denis Kuskov, CEO of Telecom-Daily.
According to reports, the leader in terms of profitability in 2023 was Beeline with 42.5%. Kuskov noted that Rostelecom took second place (40.82%), followed by MegaFon (40%) and MTS (39.1%).
At the same time, MTS’s net profit increased by 67.5% to 54.6 billion rubles in 2023, MegaFon – by 43.2% to 39.98 billion rubles, Rostelecom – by 20% to 42.3 billion rubles. Beeline showed the strongest growth: VimpelCom’s adjusted net profit in 2023 increased by 6 times to 3.37 billion rubles.
Both of the Big Four showed a significant increase in profits in the fourth quarter of last year: VimpelCom – fivefold, MTS – threefold (on an annual basis).
“Last year showed that the Russian telecommunications market is able to cope with the challenges posed by difficulties in the supply of foreign equipment and other sanctions restrictions. Companies generally solved their problems by both diversifying their suppliers and creating their own IT solutions,” Kuskov emphasized.
According to him, the largest operators not only increased revenues from telecom services, but also began to actively expand the scope of their activities.
“For example, services in the field of cloud services, cybersecurity and working with big data are increasingly generating more revenue,” he added.
Stock analysts expect continued growth in average revenue per user in the telecom segment this year. This should be a result of the further development of ecosystems, the introduction of new digital services and solutions (including the B2B segment), as well as increasing the efficiency of business processes through automation.