What's going on with MTS? Lost operator strategy


Opposition between operators on the Russian market has always carried an element of surprise, and price wars

have become a familiar feature of the landscape.The strategy of each operator was understandable and quite transparent, even for a person who is far from the vicissitudes of the market struggle. MegaFon relies on technology, high data transfer rates, and is actively building a network. At MTS, they are guided by the price / quality ratio, while paying great attention to marketing and promoting their own brand, along the way creating what is called an ecosystem. Tele2 built the image of a discounter with fair prices, while simultaneously increasing its presence throughout the country - they played catch-up with all operators. Beeline was lost for some time due to the fact that it did not invest sufficient funds in the development of the network, but now it has successfully rebranded, found a new note in communicating with customers, the slogan sounds like "On your side." Pay attention to how the market has changed, the same MegaFon is now moving from the slogan "MegaFon - the future depends on you" to "MegaFon is the number one operator." In terms of meaning, it turns out that the future has already been built, and in the present you need to use its fruits.

Attitude towards operators in Russia is undeservednegative, everyone considers it their duty to kick any company, as it is bad, provides low-quality services, and further down the list. Operators do not hear a kind word, despite the fact that by any indicator they have built some of the best networks in the world, they are always to blame for everything. Consumers do not have an adequate perception of the quality of networks, the low cost of services, it seems to them that everything is bad and is only getting worse every year. They take more money, give less services. The reality is that traffic consumption is growing every year, while the cost per unit of traffic is falling - but who cares? Look at the advertisement of 1999, feel the cost of communication services.

Of course, the comparison is incompetent, but for a largedistance, you can clearly see what is imperceptible within a couple of years - prices are falling, the number of services is growing. There is a feeling that in Russia there is a paradox when prices rise for everything without exception, but communication becomes cheaper in terms of each transferred GB. To understand the phenomenon, imagine that every year you spend more and more electricity, and the cost of kW is less and less. Represented? Alas, this does not work with energy, and it is easy to explain to you why this is so. But in cellular communications, the same energy, converted into your conversations, correspondence, data consumption, suddenly becomes cheaper year by year in an unexpected way. The simple economic principle “you consume more, you pay more” does not work here. And this is not bad for the market as a whole, everyone, without exception, benefits from this - business, consumers, and the economy. Operators can hardly be called poor hangers-on, but they have no money for a wide life without restrictions. Investments in networks, equipment and development are huge, none of the operators has had such money in recent years. And the crisis began long before 2022, which is evident from all the actions - the abolition of unlimited tariffs, captious calculation of the cost of each service, the rejection of additional areas of development.

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Under these conditions, all operators live withoutexceptions, they just have the same environment. I often hear a recitative about a cartel when operators take the same steps. But living in the same conditions, they cannot react differently. Imagine that it is raining heavily outside and you have to go to work. You have a choice - wear a raincoat or take an umbrella. Rain is a common condition for everyone, and most people do not agree that they will go outside with umbrellas, it is difficult to suspect them of deliberately reacting to external factors in the same way. But what is considered normal for ordinary people raises questions regarding operators - after all, they do not know how to look at the "rain", but exclusively agree among themselves in order to deceive the poor, unfortunate subscribers. As in any story of this kind, my mind always draws a top manager of some operator who plays the role of Dr. Evil. Perhaps it's best to imagine MegaFon's CEO, Khachatur Pombukhchan, surveying Moscow from the tower in the Armory, drawing a plan to capture the market on the board, and from time to time dragging on IQOS. You can visualize any general director of the operator, MegaFon simply has the coolest office and a bird's-eye view of Moscow. Cinematic picture, infinitely far from reality.

Operators to some extent ape, copyeach other and their approaches. The good old "don't bring the bad news first" game. Everyone is waiting for someone whose nerves can't stand it, who will raise prices a little bit, and then others do the same. But sooner or later everyone enters this water, since the conditions of the game are the same for everyone. And there is real competition in the market, in which it is difficult to single out any favorites, the state simply does not have them today. Everyone gets approximately the same opportunities and access to officials, although "their own" in the person of Tele2 are hit harder and limit price increases, turning a blind eye to the fact that other operators are doing exactly the same thing. “Beat your own people so that strangers are afraid” - apparently, officials in the FAS profess this maxim.

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Against the background of the same problems and challenges in the lastyear something went wrong in MTS. The company suddenly became infantile (for a long time I was picking up an association, it was this definition that came to mind). The infantilism of MTS is expressed in the fact that the operator is childishly touchy, like a young girl, wants to be persuaded to do what is beneficial to him. A striking example is the development of 5G, which no Russian operator can pull alone due to the need to invest too much. It is corny expensive, and there is nowhere to take this money. Therefore, the operators decided to improve networks together, organized the New Digital Solutions company to develop 5G in our country. Last summer, all operators were invited to this company without exception, on equal terms and without any restrictions. MTS refused to participate in this company, as a result, MegaFon, Beeline and Rostelecom (the owner of Tele2) ended up in it with equal shares. And now, a year later, MTS decides to participate in a joint venture.

Remembered this event since the summer of 2021MTS' decision not to participate in the joint venture caused bewilderment among all market participants. Everyone looked at the financial statements of MTS, understood how much 5G costs, and shrugged. The main question was one: “What do we not know? What secret move does MTS have to be able to compete with three operators at the same time? Life has shown that there were no secrets and trump cards up our sleeves, that very childish infantilism simply manifested itself - we ourselves have a mustache. Such positioning and slogans within the company that we can build everything ourselves. The dialectic of our market is such that it is impossible to be outside the general trend, this brings a lot of problems. Much like trying to put your fingers in a running meat grinder, the result is guaranteed and predictable.


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"Break and then rejoin" strategyit looks at least surprising, since it does not bring any advantages, no one persuaded MTS to join this year, and the whole year of joint work for the operator is lost, he has to catch up. There is not much, but this is just an illustration of what is happening.

MTS has always relied on marketing, on strengthening the perception of the brand, and is quite successful in this. Pay attention to how much MTS invests in its own promotion.


From a casual conversation in a Moscow restaurantI learned that MTS is planning a rebranding and is focusing on ecosystems - communications, entertainment, finance. That is, in one package there will be different services, the idea is not new. But rebranding allows you to refresh the perception of the operator, and it is necessary for all companies, which Beeline felt well. I am sure that similar changes will happen in the near future with all operators, they have not updated their positioning for too long.

But the main question regarding MTS is whatis the operator's strategy? When discussing financial results, top managers quite clearly describe tactics, but the strategy remains behind the scenes. And it is completely incomprehensible from any point of view, since the development of the ecosystem goes on as usual, but the telecom operator is somehow lost against the background of this magnificence. The results of MTS in the market are excellent considering the circumstances, and there is nothing to complain about.

And here MTS begins to surprise. Without any announcement, the company returns to the market an unlimited tariff plan "MTS Access".

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In fact, this is unlimited internet and voice,the cost varies depending on the region, but looks very low. MTS has no competitors, no operator offers anything like this. And most importantly, MTS is breaking the market both for itself and for all other operators. And there are simply no reasons for this, in any case, it is impossible to find them in the outside world.

MTS has a fairly large number of subscribers whouse expensive tariff plans, for example, “Smart for Friends” can cost 1,300 rubles for old subscribers in Moscow. And switching to MTS Access for 890 rubles with exactly the same set of services looks like a direct and undisguised savings.

In addition to internal cannibalization, there is also the question ofIn terms of how subscribers of other operators rush to use this application, the proportion of those who change operators is low, there are few so-called “runners”. And even such a generous offer is perceived by many as something temporary, and most importantly, having a flaw that is not yet visible. Trust in operators is generally low, this is an echo of past tricks of companies, and MTS is no exception.

I will not go into details, but twisted differentmodels with the MTS Access tariff, in none of them could I find obvious advantages for MTS in the medium term. An increase in revenue at the moment and then a drop in income from "heavy" subscribers that the operator already has.

Explanation that MTS, turning off unlimited forcorporate subscribers, makes such an offer so that they take advantage of it far-fetched. Here the economy, of course, can be positive, on average, unlimited for corporate users costs about 220 rubles. But why give such a tariff, if corporate users can still choose something from the current line, and in the description of MTS Access they frighten that they will turn off additional packages for commercial use. There is no logic in this decision, or it eludes us. And it looks exactly the same as the story of the 5G joint venture. It seems that this decision is infantile, an attempt to show that we can do this, a kind of fiddle for the entire market. But there is no economic overtones here, just a desire to annoy everyone around.


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MTS currently does not have a margin of safety forthe introduction of mass unlimited, the company lives in very limited conditions. And this is confirmed by the words of MTS during the pandemic, when the company was sincerely worried that the network could go down, here are the words of Alexei Korn, president of the company in 2020:

"That doesn't mean you have to give upwatching movies online or participating in video conferences as part of remote work. I'm talking about the fact that in the current situation, you can refrain, for example, from forwarding funny, but "heavy" videos in messengers to dozens of your contacts. When the number of such videos grows exponentially, it creates an unnecessary but significant burden on the infrastructure of operators. Memes and good mood are important, but now the consumption of content on networks must be approached responsibly!

In 2020, MTS, like other operators, hadunlimited access to infrastructure equipment, could expand the network at the moment, increasing purchases. At the moment, the active expansion of the network is in doubt, there is no way to buy equipment here and now. And against this background, unlimited is launched? When operators, including MTS, began to refuse them at the end of 2021. It looks like the lack of a clear strategy and putting out fires, read - getting results in only one possible way, discount. For MTS, this is a familiar situation, throughout the history of retail, MTS has discounted goods to cost, just to show sales, losses from such operations were paid at the expense of subscribers. At times they refused this, but then returned to the proven scheme.

The fact that the MTS strategy is incomprehensible from the outsidelooks like infantile throwing, self-affirmation, it seems strange. The company has a good perception in the eyes of consumers, it has a confident business that does not need such measures. But if they are, then someone needs it. But this just says that there is no general strategy, and life goes on in the mode of a scalded cat, when local fires are put out. It is impossible to predict such throwing, they are out of the context of the market situation. And in general, this is an attempt to show Kuz'kin's mother to everyone, and then to fix what is broken with a bang.

After all, what de facto has now been done in MTS for everythingmarket? They crossed out more than six months of efforts by operators to avoid unlimiteds, explanations that networks are loaded and will not withstand the load, including their own. Now any person has a reinforced concrete argument - after all, MTS are not fools, and if they made an unlimited, then it means that there is an opportunity on the network, and it is also profitable from the point of view of money. It turns out that all the operators lied to us. Recall that such an opinion is already built into the minds of most people, and we get a predictable result. The situation is very difficult for MTS, as the company puts itself out of the market with its attacks and causes bewilderment. A kind of frondism that will end predictably, since neither MTS nor anyone else has any opportunity to support unlimited in Russia. The only question is how long MTS will persist in their desire to show that they can do so. In my opinion, the company needs a long-term strategy and management who can follow it, and not try to put out fires with gasoline. It seems to be in action, but it blazes brightly.

Of course, there is always the possibility that I,as well as all colleagues in the market, I don’t see anything that makes MTS do this. But if there are such factors, then they will soon become known to us and they are unequivocally negative for MTS, it is possible to worsen your business only because of serious problems.

Finally, I want to show the results of the survey, which operator of the big four do you consider the best.

link to survey

Tariff "MTS Access": the return of unlimited Internet for everyone?

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