Telecom Operators

Russia’s MegaFon shows strength and denies CEO rumors

MegaFon, one of Russia’s leading telecom providers, posted positive results for Q2 2017, with revenue up 13.9 percent year-on-year (y-o-y) to reach RUB 89,689 million. OIBDA increased by 15.8 percent y-o-y to reach RUB 34,236 million. The company has denied recent press speculation regarding the possible resignation of its CEO Sergey Soldatenkov.

In an effort to reassure its shareholders, MegaFon said recent reports and media speculation published in Russian business daily Vedomosti on the possible resignation of the company’s CEO are inaccurate. Sergey Soldatenkov has the “full support” of the board of directors, the company said in a press release, who have been “encouraged by a number of improvements in performance.”

“Shareholders are satisfied with the company’s development and support the management and specifically Mr. Sergey Soldatenkov,” said Mr. Streshinsky, Chairman of the Board of Directors at MegaFon. “Competent implementation by the company’s management of the new strategy made it possible to turn around negative sector trends in 2Q 2017, and the situation in the company’s business and on the market has shown the first signs of improvement.”

According to the press release, the Board of Directors is looking forward to Mr. Soldatenkov “leading the company forward in implementation of its 2020 development strategy.” In May, MegaFon announced a new strategy for its development over the next three years, to transform from a traditional telecom operator into an integrated digital services provider.

In terms of financials, Mr. Soldatenkov said the company has “reached a turning point where we see signs of recovery in our overall mobile revenue which has been declining during the previous quarters.” Mobile data and VAS services were the strongest revenue drivers, he said, as customers “continue to recognize the high quality of our 4G/LTE network.” MegaFon is also focused on increasing efficiency and improving margins, he added.  

In August, MegaFon became one of the first operators in Europe to launch a commercial Gigabit LTE network in partnership with Nokia. The peak data download speed reached 979 Mbps using Nokia Air Scale. The test was conducted using Sony’s Xperia XZ Premium smartphone, using the Qualcomm Snapdragon X16 LTE modem, which was the first commercial mobile device in Europe which supports Gigabit LTE.

Nokia Flexi Multiradio modules were used as the base station, which are equipped in most of the sites of the Moscow MegaFon branches, and the Nokia AirScale system module is already in place in order to support the path to 5G.

The demonstration, according to Nokia’s vice president, Eastern Europe, Demetrio Russo, was “another important step towards the launch of MegaFon’s 5G network.”

Russo noted that Nokia was “excited by the cooperation involved in this project, the successful implementation of which will make it possible for MegaFon to offer its subscribers a unique experience of using modern broadband services during the transition to 5G.”

In June, during the Saint Petersburg Economic Forum, together with Huawei, MegaFon demonstrated the operation of a 5G network at 35Gbps, achieving what was then the absolute record in Russia for mobile internet speed.