Russia’s MTS to buy devices from Samsung for 7 bln rbl next 3 yrs

MOSCOW, Oct 21 (PRIME) -- Russian mobile operator MTS has allocated 7 billion rubles to its unit, RTK, which manages the company’s retail chain, to finance a 3-year distribution agreement with Samsung, according to the operator’s documents, seen by PRIME on Friday.

“The amount of the deal in monetary terms and in a ratio of the issuer’s assets value: no more than 7 billion rubles, which is 1.2% of the balance value of MTS’ assets,” MTS said.

The operator’s press secretary Dmitry Solodovnikov said MTS has already provided collateral to RTK, and the new agreement is signed because the previous has expired. Earlier the volume of a guarantee did not exceed 1% of the balance value of assets, and now the guarantee increased due to volatility of exchange rates, among others.

RTK could spend more than 7 billion rubles on purchases from Samsung if it repays the liabilities under the provided guarantee, the press secretary said.

“Samsung has traditionally held leading positions in our sales, and we think demand for Samsung gadgets will remain at a higher level in the future…We believe the situation with the Note 7 would not undermine popularity of Samsung smartphones in Russia,” Solodovnikov said.

“There are many cases when innovative smartphones, as soon as handed over to consumers, behaved unexpectedly. However, it did not influence popularity of gadgets the companies manufactured.”

The flagship Galaxy Note7 of the South Korean company ruined its reputation by a wave of battery explosions. Samsung has not officially opened sales of the smartphones on the Russian market, which still has imported less than 1,000 phones, according to earlier reports.

(62.4194 rubles – U.S. $1)

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