MTS Q2 net profit falls

Russia’s biggest telecommunications company, Mobile TeleSystems (MTS) has revised the year’s sales guidance as voice and Data usage has ramped high in the market. MTS Q2 witnessed a relative net profit knock down earlier this year contributed by a foreign exchange gain earlier year.

Net profit sloped down to 39% to US$354 million compared to US$ $577.4 million last year. The company had witnessed US$195 million foreign exchange gain in the Q2 last year due to the currency exchange gain.

Data revenue in Russia increased 67% on year to US$124.4 million in the three month period. Mobile Internet use is elevated globally because of the growing status of smartphones, like the iPhone.

The ARPU in Russia mounted 3% to US$ 8.20, while in Ukraine it ascended 10% to US$5.00.

According to Chief Executive Mikhail Shamolin, Given the growth in the first half of 2010 and more positive economic sentiment, the company feels confident to raise sales growth guidance to roughly 10% for 2010. The company had previously announced it expected single digit sales growth for the year compared with 2009.

MTS continues to see downward pressure on margins from retail operations in Russia, but is observing good seasonal trends in rising voice and data usage, the healthy contribution from the sale of handsets and consumption of higher-value products like voice and data roaming and long distance.