Mobile TeleSystems (MTS)
Russia's top mobile carrier, also running banking, streaming, and cloud units.
On the record
Checkpoint: H1 2026 earnings release, expected to show whether the profit collapse from high interest rates is easing
The call
MTS keeps growing revenue on its telecom and banking base while Russia's high interest rates eat the profit, and Yandex keeps building the digital services MTS is trying to add.
MTS is Russia's largest cell phone company. It owns the phone towers, the customer accounts, and a banking license, which normally would make it very hard for competitors to replace. However, the company's profits have fallen apart: it made three times less money in the first nine months of 2025 compared to last year, even though it sold more services. The reason is Russia's very high interest rates (over 20 percent), which means the company pays enormous amounts just to borrow money for its business. The one thing that could change everything is whether those interest rates come down in the next few quarters, because if profits stay this low, the company cannot afford to keep paying shareholders the money it promised them.
Why
01
AI pressure: None apparent. MTS runs its own MWS GPT service built on a licensed Chinese LLM, treating AI as a product to sell, not a rival eating its base. Could AI do the core job? Unlikely.
02
Bigger players: Yandex. Yandex already runs live cloud, streaming, fintech, and its own YandexGPT, competing directly with MTS's non-telecom ecosystem push. Could a giant copy it? No, they are blocked.
03
What protects it. Licensed spectrum, physical base stations, and 83 million billing relationships that a challenger cannot copy quickly inside Russia.
What would change this call
MTS net profit trend in Q1/Q2 2026 earnings releases. Shows whether the 9M2025 profit collapse was temporary or a structural margin problem.
Whether MTS itself (not just parent AFK Sistema) is added to Western sanctions lists. Would confirm direct geopolitical risk to the equity, not just the parent company.
MTS dividend announcement or cut following the 2026 tower-sale cash infusion. Shows whether the RUB 70bn dividend payout is sustainable given the profit squeeze.
Whether MTS itself (not just parent AFK Sistema) is added to Western sanctions lists. Would confirm direct geopolitical risk to the equity, not just the parent company.
MTS dividend announcement or cut following the 2026 tower-sale cash infusion. Shows whether the RUB 70bn dividend payout is sustainable given the profit squeeze.
Key numbers
- 9M2025 net profit fell to RUB 16.06bn from RUB 49.4bn
- Q1 2026 revenue RUB 201.3bn, up 14.7% year over year
- AFK Sistema owns 42.09% of MTS directly
Named risks
- Net profit collapse from high Russian interest rates squeezing margins despite revenue growth.
- Majority owner AFK Sistema under US sanctions since November 2023, with contagion risk to MTS.
- Equity trades only on MOEX in rubles under capital controls, limiting exit for non-Russian holders.
- Dividend of RUB 69.941bn maintained despite profit dropping roughly 68% in 9M2025, raising sustainability doubts.
- Conflicting headcount data across sources makes workforce size and trend unverifiable.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| MegaFon | contesting | MTS leads with 83.4M subscribers vs MegaFon's 79.4M as of Q4 2025 |
| t2 (formerly Tele2, owned by Rostelecom) | contesting | t2 has 48.9M subscribers and leans on adtech micro-targeting per 2026 market analysis |
| Beeline (VimpelCom) | contesting | Beeline investing in AI-based churn mitigation; 44.1M subscribers as of Q4 2025 |
| Yandex and Sber | contesting | MTS, Yandex and Sber together account for 70% of Russia's roughly $530M AI investment |
Questions people ask
- Is Mobile TeleSystems (MTS) profitable in 2025 and 2026?
- Yes but margins are shrinking. 9M2025 net profit fell 68% to RUB 16.06bn from RUB 49.4bn a year earlier despite 14% revenue growth, largely due to Russia's high interest rates. Q1 2026 profit rebounded 46.4% y/y to RUB 7.2bn, suggesting partial stabilization.
- Who owns Mobile TeleSystems (MTS)?
- AFK Sistema, a Russian conglomerate, holds 42.09% of MTS directly as of June 1, 2025, per MTS's own investor-relations disclosure. AFK Sistema has been under US sanctions since November 2023. MTS trades on the Moscow Exchange under ticker MTSS; its NYSE ADR was delisted in 2022.
- Could AI replace MTS's business?
- No. MTS's core moat is licensed spectrum, physical network infrastructure, 83.4 million subscriber relationships (Q4 2025), and a regulated banking license via MTS Bank, none replicable by AI. MTS instead sells AI as a product, launching MWS GPT in March 2025 and Cotype Nano LLM in December 2024.
- Who is MTS's biggest competitor in Russia?
- MTS leads Russia's four-player mobile oligopoly with 83.4 million subscribers (Q4 2025), ahead of MegaFon (79.4M), t2 formerly Tele2 (48.9M, owned by Rostelecom), and Beeline (44.1M). In AI/cloud, MTS also competes with Yandex and Sber for enterprise LLM customers.
- Is MTS under Western sanctions?
- MTS itself has not been directly sanctioned as of mid-2026, but its majority owner AFK Sistema has been under US sanctions since November 2023. MTS's NYSE ADR (ticker MBT) was delisted in 2022, and shares now trade only in rubles on the Moscow Exchange.
- Why did MTS sell part of its cell tower business in 2026?
- In June 2026, MTS sold 49.9% of its tower unit BIK (over 24,700 towers) to fund Investitsii 18 for an enterprise value of roughly RUB 130bn, deconsolidating over RUB 80bn of debt and receiving RUB 21.7bn cash while retaining 50.1% ownership.
Timeline
- 2026-07-09MTS partnered with Russian State Library to deploy MWS AI semantic-search platform
- 2026-06MTS sold 49.9% of tower unit BIK to Investitsii 18 for RUB 130bn enterprise value
- 2026-05-22MTS reported Q1 2026 results: revenue RUB 201.3bn, net profit RUB 7.2bn
- 2025-11MWS GPT platform expanded to offer Chinese LLMs Qwen and Kimi
- 2025-099M2025 net profit fell to RUB 16.06bn from RUB 49.4bn a year earlier
- 2025-03-05MTS reported FY2024 revenue of RUB 703.7bn, up 16% year over year
- 2025-03MTS launched MWS GPT, a cloud-based B2B multi-LLM platform
- 2024-12MTS AI released Cotype Nano, an open Russian-language LLM
- 2024-04-19MTS Bank completed IPO on Moscow Exchange, raising about RUB 11.5bn
- 2023-11AFK Sistema, MTS's majority owner, placed under US sanctions
Revision history
25 July 2026
First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Wikipedia (MTS infobox)
- MTS IR Shareholder Structure (2025-05-31)
- Wikipedia, Sistema
- MTS Bank IPO double oversubscribed, source (2024-04-19)
- MTS to cut its stake in MTS Bank after additional share issue (2024-03-15)
- Russia's MTS considers quarterly or semi-annual dividends (2026-07-15)
- Mobile TeleSystems Public Joint Stock Company (MOEX:MTSS)
- MTS reports revenue growth for 2024 (2025-03-05)
- MTS WebServices opens access to Chinese LLM in the MWSGPT service (2025-12-26)
- MTS plans to pay dividends for 2025 in the amount of 69.9 billion rubles (2026-06-21)
- AFK Sistema's annual revenue exceeded 1.3 trillion rubles (2026-04-16)
- MTS launched MWS GPT (2026-07-16)