Exclusive: MTS unveils plans to cut retail portfolio

By:
James Pearce
Published on:

CMO Vasyl Latsanych claims reducing MTS's 6,000-strong retail footprint will help reduce high levels of churn in Russia

Russian operator MTS has unveiled plans to reduce it retail portfolio, as it looks to tackle high levels of churn within the Russian mobile industry.

According to Russian regulators, around 100 million SIM cards are sold in Russia every year, a situation that is “ridiculous” according to Vasyl Latsanych, the chief marketing officer at MTS.

In an exclusive interview with GTB, Latsanych said one key driver for the huge sales of new SIM cards is a high number of retail stores. He said MTS has around 6,000 retail outlets in Russia and 800 in Moscow.

“We don’t have to fuel the symptoms – we have a plan on how to cope with that. We want to dramatically decrease the number of stores – which will have an effect on the sales and then on churn, but it will have a beautiful effect on our financials because it is unprofitable the way it is set up,” he explained. 

“It doesn’t add to the bottom line. We need to be accurate enough to cut out those less performing outlets and contribute positively to both the top and bottom line.”

This, Latsanych added, would help reduce the number of SIMs sold by around 40%, and if its rivals followed suit, sales could drop to 60 million in the next two years.

“It is a question of how we manage the flows, but the bigger question is around how the market manages the competition. We can’t just decrease our number of stores without our competitors doing the same or we will lose the traffic. 

“So we would need to see similar movement in our competitors, because in that case, the whole market will be healthier.”

To read the full, exclusive interview with MTS CMO Vasyl Latsanych, check out the latest issue of GTB.