Ваш браузер устарел
Вы пользуетесь устаревшим браузером, который не поддерживает современные веб-стандарты и представляет угрозу вашей безопасности.
Пожалуйста, установите современный браузер:

CEO’s address to shareholders

CEO’s address to shareholders

Dear Shareholders and Investors!

On the occasion of the Annual General Meeting of Shareholders of MegaFon, I would like to draw your attention to the principal achievements of the Company in 2013.

MegaFon is the market leader in the field of new communication technologies. Last year we once again confirmed our leadership in this area, due to active development of our 4G/LTE network, which covered 49 regions of the country at the end of the year. The acquisition of Scartel/Yota was a significant additional step towards increasing the availability of 4G for our subscribers. This transaction increased the capacity and quality of our network and provided us with indisputable competitive advantages in the data market. As a result, the mobile Internet has made the greatest contribution to the growth of the Company’s revenue. In 2013, our consolidated revenue increased by over 9% YOY, reaching 297.2 RUR bln. Our revenue from data services in Russia increased by 28.6% to 49.7 RUR bln. This growth rate is comparable to the world’s most developed communications markets. We remain confident about the prospects for the Russian mobile data market, and expect the growth trend to continue in 2014.

The main focus of MegaFon’s development in 2013 was on improving the quality of customer service and efficiency. During the year we took a number of steps to simplify tariff plans, we modified the terms of services provided, making them more transparent and understandable, we allocated significant resources to optimize sales processes, and we expanded the customer service network. We have streamlined our interaction with corporate clients, creating for them a separate federal B2B-service center. In addition, in May 2013, we signed an agreement creating a strategic partnership with the leading international mobile operator Telefonica. This partnership will allow us to benefit from economies of scale when purchasing equipment and make available to us the highest level of technical expertise, as well as providing our customers with access to advanced telecommunication services outside Russia.

In 2013 we donated about 150 million rubles for charity and assistance to socially vulnerable groups. Also we implemented a number of social investment and philanthropic programmes in preparation for the Olympic and Paralympic Winter Games in Sochi. And, as a General Partner of the Games, we are extremely pleased with their success and the importance to that success of our contribution to the Olympic communications infrastructure.

In 2013 we managed to create a resilient platform that we believe will guarantee solid results and profits for our shareholders, despite the uncertainties in the current economic situation. Our financial performance was excellent, and our growth rate was almost double that in the market generally. And in Q3 2013, we moved from third place to second place among the “Big Three” in terms of total revenue. Our cash flow reached over 82 RUR bln (16.3% higher than in 2012). On the basis of the 2013 results our Board of Directors is recommending a dividend payout in amount of 40 RUR bln for the last three quarters of 2013, which is 64.51 RUR per share (or GDR) and is fully in line with our dividend policy. After taking into account the interim Q1 2013 dividend paid in June 2013, the total dividends for the full year 2013 will amount to 46.4 RUR bln (or 74.85 RUR per share, or GDR), and the 2013 payout ratio will reach 90%.

We are closely watching the geopolitical environment in the world and the competitive situation in themarket, and are confident that our operating strength as well as our competitive edge will allow us to continue to maintain and strengthen our leading position in the Russian telecommunications market. I would like to thank all our employees, management, members of the board of directors, and shareholders for their support. I am confident that the year 2014 will be as successful for our company as 2013.


Sincerely,
Ivan Tavrin
CEO of PJSC MegaFon