MEGAFON Annual Report 2016
BRINGING THE FUTURE CLOSER

Business Model

Our business model is based on a strategy of growth and reinvestment. We always try to strengthen our positions in the market by reinvesting incoming cash flows into business development.

We make sure that a sufficient part of the free cash is distributed in the form of dividends, providing shareholders with an attractive return on invested capital.

Interaction with suppliers is carried out within the framework of open tenders, as well as business meetings, participation in specialized Russian and international unions and organisations.

We strive to build long-term and stable relations with suppliers and business partners.

RESOURCES AND ASSETS

EXTENSIVE MOBILE NETWORK

143.7k
base stations
>130k km
FOCL backbone network

RETAIL
NETWORK

>8k
points of sale in controlled distribution network

CUTTING-EDGE TECHNOLOGIES

Wide range of products and services

RECOGNIZED
BRAND

Brand recognition and strong loyalty

OUR
TEAM

>31k

employees
High quality of services and products

PRODUCTS AND SERVICES

WIRELESS
SERVICES

83.4%(1)
of total revenue

WIRELINE
SERVICES

8.1%(1)
of total revenue

SALES OF HANDSETS
AND ACCESSORIES

8.5%(1)
of total revenue

CUSTOMER BASE

77.4m

WIRELESS SUBSCRIBERS(2)

31.7m

MOBILE INTERNET USERS(2)

Revenue

RUB 316.3BN

CAPEX

RUB 65.6BN

OIBDA(3)

RUB 121.1BN

OIBDA margin

38.3%

Free cash flow

RUB 46.9BN

Dividends

RUB 50BN

(1) As % of total revenue.
(2) In Russia and abroad.
(3) Adjusted OIBDA. Adjusted OIBDA is OIBDA net of impairment charge in the amount of RUB 3.4 bn related to the goodwill allocated to the Broadband Internet cash generating unit.