PRESS: Russia’s MTS cuts base station building rate 36% in 2016

MOSCOW, Jan 23 (PRIME) -- Russian mobile operator MTS has reduced the rate of construction of new base stations by 36% in 2016 to 10,239 units, including 6,313 stations supporting LTE and 2,233 units of 3G, business daily Vedomosti reported Monday, citing the operator’s spokesman Dmitry Solodovnikov.

MTS had not been reducing the pace of construction since 2013, Solodovnikov said.

The operator rolled up LTE networks in all regions of the country in late 2015, four years earlier than the license deadline, and is completing the main stage of laying out 2G and 3G, the spokesman said, adding that MTS focuses on pin-point coverage and improvement of connection quality inside buildings.

Fewer new base stations will not undermine connection quality, Solodovnikov said. MTS actively builds LTE networks in the 1,800 megahertz range, which cover a four-time larger area than 2,700 MHz, and multi-band LTE Advanced networks, which give a faster Internet.

Mikhail Alekseyev, managing partner at AC&M-Consulting, said an intention to reduce the rate of base station construction could be explained by a slight revision of MTS’ strategy, for example, to shift an accent from expansion or maintenance of a market share to a higher free cash flow.

A decrease in capital expenditures could offset some decline in operating income before depreciation and amortization (OIBDA) in 2016 and allow the company to raise dividends, Alekseyev said.

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