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MOSCOW, March 16 Russian mobile operator MegaFon
forecast its revenues would be flat or grow slightly
in 2017 after reporting a fall in fourth quarter earnings and
sales on Thursday.
MegaFon, which is trying to reinvent itself as an internet
player, said net profit dropped 42 percent to 3.1 billion
roubles ($53 million) due to a 3.4 billion rouble impairment
charge relating to revised forecasts for broadband operations.
It said this was "in response to the current challenging
economic environment and competitive pressures". In a now mature
Russian market, mobile operators are struggling to increase
revenues and have been forced to cut prices to retain customers.
Earlier this year the company, Russia's number 2 mobile
operator, completed the acquisition of a controlling stake in
internet group Mail.ru in a bid to move away from a
traditional telecoms business structure and tap new sources of
MegaFon said its revenue fell 0.8 percent to 81.3 billion
roubles in the fourth quarter, hurt by a shift among consumers
to digital technologies and an increased uptake of more
economical bundled tariffs, although this was partly offset by a
28.4 percent jump in lower margin revenue from handset sales.
The company said its Adjusted Operating Income Before
Depreciation and Amortisation (OIBDA) fell 1.6 percent to 29.1
billion roubles in the fourth quarter.
MegaFon forecast 2017 OIBDA of 112–118 billion roubles and
capital expenditure of 55-60 billion roubles, not including
Mail.ru, while revenues are expected to be flat or rise slightly
after growing by 0.9 percent in 2016.
Its Russian wireless subscriber base increased by 1.1
percent year on year to 75.6 million as of Dec. 31, but the
company said it had shifted its focus to retaining existing
customers and increasing their life-time value.
MegaFon's data service user base increased by 5.8 percent
year on year, due to the ongoing promotion of its data services
and an increased adoption of data-enabled devices.
($1 = 58.4687 roubles)
(Reporting by Maria Kiselyova and Dasha Afanasieva; Editing by