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Mobile TeleSystems CEO Discusses Q2 2012 Results - Earnings Call Transcript

I'll now turn the call over to Andrei Dubovskov, President and Chief Executive Officer of MTS.

Andrei Dubovskov

Ladies and gentlemen thank you for joining us on today's conference call to discuss the company's financial and operating results of the second quarter 2012.

Joining me today are Alexey Kornya, Vice President, Chief Financial Officer; Aleksander Popovskiy, Vice President, Chief Operating Officer; Michael Hecker, Vice President, Strategy, Corporate Development and M&A; and –ěleg Raspopov, Vice President Foreign Subsidiaries.

(Inaudible) and other strong set of results for MTS Group for the second quarter. Group revenue for the quarter to reach over $3.1 billion USD in spite of a significant weakening of our core currencies versus the USED. We saw sustained growth in usage of voice and data products in each of our markets of operation. We also see signs of stability and moderate competitive pressures in our markets. For the period total revenue in Russia increased in ruble terms by 9% year-over-year to 82.8 billion rubles. (inaudible) city voice usage, higher value subscribers through our efforts to optimize dealer relationships and sell more through MTS's proprietary retail chain and growth in headset sales including sales of higher value smartphones. Year-over-year our mobile business grew by 10% to 69.3 billion rubles. As we predicted, we continue to see benefits in our mobile business through a combination of strong tariff plans, prudent sales strategies and continued investments in our networks.

We see strength in upselling our mass market subscribers to better voice plans as ARPU and MOU by 12% and 15% year-over-year respectively. We also are attracting better subscribers through our own retail and partner channels. Net subscribers also contributed to the rise in ARPU and demonstrate more loyalty.

For the period churn rate percent 11.3% to 10.5% and modem sales remain strong despite the cancellation of subsidies. Sustained investment in our networks makes entails the logical choice for customers who want to speak and access to the internet.

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