MOBILE BUILDING A BRIDGE BETWEEN SOCIALMOBILE BUILDING A BRIDGE BETWEEN SOCIAL NETWORKS AND ACTUAL SOCIAL LIFE

Mikhail GerchukVice President & Chief Commercial Officer, MobileTeleSystemsGSM Congress, Barcelona, 15 February 2011g y

MTS GROUP AT A GLANCE

One of the leading integrated operators in the world with > 110 mln subscribers7 countries in Eastern Europe and Central Asia#1 Russian brand in the BRANDZ™ Top 100 Most Powerful Brands (#72 globally)

Russia

UzbekistanUkraineBelarus

Armenia

Uzbekistan

Turkmenistan

IndiaIndia

MOBILE PENETRATION

3% 160%3%

44

Source: ComScore (2009), J’son & Partners Consulting

SOCIAL NETWORKS USERS

A AAverage number of

hours per day

Average number of web pages per day

World 3,7 525

Russia 6,6 1307

Brazil 6,3 1220

Canada 5,6 649

Spain 5,3 968

Great Britain 4,6 487BritainUSA 4,2 477

55

Source: ComScore (2009), J’son & Partners Consulting

MOBILE TECHNOLOGY &SOCIAL NETWORKS INTEGRATIONSOCIAL NETWORKS INTEGRATION

1. SOCIAL NETWORK ANALYSIS TO PREVENT CHURN AT EARLY STAGE

2. RED QUEST PROJECT: INTEGRATION INTO THE SOCIAL NETWORK

1. SOCIAL NETWORK ANALYSIS TO PREVENT CHURN AT EARLY STAGE:IDENTIFYING MULTI SIM USERSIDENTIFYING MULTI-SIM USERS

1. Potential churner, who has acquired a competitors SIM

already, but still is on the MTS network

2. The same customer starts to use competitors SIM more actively and

reduces usage of MTS SIMnetwork reduces usage of MTS SIM

3. MTS Customer is retained via direct marketing

communication and continuescommunication and continues using MTS SIM

RESULTS

Proof of concept launch on a test group of 1 mln subscribers - 4Q 2009Full scale project launch - December 2010Potential incremental annual revenue from the project - $ 12M

-27% Churn rate drop by SNA Campaign

50%Churn

-27%

37.5%Churn

Churn

Before SNA Campaign After Before SNA Campaign

Based on the results of SNA POC, held in 4Q2009

2. RED QUEST PROJECT:INTEGRATION INTO THE SOCIAL NETWORK

USING SNA TOOLS

Three Phases of Using SNA in Mobile Network Operators *Three Phases of Using SNA in Mobile Network Operators

Experienced usage phaseCommercial Q4 2010

Consolidating phase

phas

e

2011

Mar

ket p 2011

Learning phase

Trialphase Q1 2010

ViewOperational Strategic *2009 Frost & Sullivan

KEY LEARNINGS

Our customers are involved in social networks – so we must follow them as an operator

We can predict churners at an early stage with social networks analysis

Mobile operator can create their own social networks