Mts Beats Crowd to 4g in Moscow, But There's a Catch

26 April 2012, The Moscow Times

Vedomosti

Mobile phone operator MTS became the first company to activate 4G service in Moscow, beating out competitors who have so far only fired up LTE networks in the far-off city of Novosibirsk.

The upgraded network will function inside the Garden Ring Road in a test regime and will allow users to reach data transfer speeds of up to 100 MB per second, the company's operations vice president Alexander Popovsky told Vedomosti.

But for now, MTS can't charge for the service, since the company still has not received rights to use the frequencies necessary to operate the technology.

The upside for consumers is that MTS will offer the service for free for those who have devices that can connect to the network.

But another stumbling block stands in the way. Currently, there are no smartphones or tablet computers on sale in Moscow with the capabilities to connect, meaning the only way to access the network is by purchasing an MTS modem or a Yota brand modem with 4G capability.

So far only MegaFon and Skartel, which operates under the Yota brand, are offering 4G services to their customers, and only in Novosibirsk, Russia's third largest city by population hidden away deep in Siberia. Both companies have said they will begin to offer 4G services in Moscow in the first half of May.

MegaFon offers its customers access through Skartel's network, as Skartel is the only company that currently has rights to operating the frequencies used for the technology. The other players, including MTS and VimpelCom, will have to wait for the long-delayed tender process that will distribute the rights for the frequencies.

The tender process, which was to have been held by Feb 1, has still not been announced.

Sistema Could Issue Eurobonds

03 May 2012, The Moscow Times

Reuters

Oil-to-telecoms conglomerate Sistema has mandated banks to arrange a series of international investor meetings from May 2, which might lead to a eurobond sale, three sources told Reuters on Wednesday.

"The size is not big, about $300 million to $400 million," one source said, adding that the company was looking at a 10-year maturity.

Sistema, which owns Russia's biggest mobile-phone operator MTS and midsized crude producer Bashneft, has mandated Deutsche Bank, Morgan Stanley and VTB Capital, another of the sources said.

Sistema, which has no eurobond issues outstanding and has 58.5 billion rubles ($2 billion) in four domestic bonds, would not comment.

A new dollar deal, subject to market conditions, will add to more than $17 billion raised by Russian borrowers via eurobonds in 2012 — more than half the total for last year — as investors are still hungry for Russian risk after March's $7 billion sovereign debt offer.

The cost of insuring Russian debt against default for five years was trading at 186 basis points, according to Markit, down from more than 220 points in February when opposition protests unsettled investors.

Russian five-year credit default swap prices are also lower than the iTraxx SovX CEEMEA Index, which includes countries as such as Hungary and Ukraine, and now trades at 278 points.

Reuters StarMine's implied rating for Sistema, co-owned by billionaire chairman Vladimir Yevtushenkov, stood at BB+ on Wednesday, higher than its corporate credit ratings from Fitch and Standard & Poor's of BB- and BB, respectively.

The StarMine rating does not take government or shareholder support into consideration and is indicating the company might be soon upgraded by the top rating agencies.