Photo from UNIAN
MTS is in talks with major international telecommunication operators on purchasing rights to use their brands in Ukraine, Russian newspaper Vedomosti reported with reference to a source close to the shareholders of MTS, an employee of one of company’s competitors and a another source close to MTS.
Richard Branson's Virgin Group and British Vodafone were called among such strategic partners, the source told the publication. However, it was noted that MTS Ukraine could not reach an agreement with Virgin. Apparently, it will be Vodafone that will provide rebranding for MTS in Ukraine.
According to another source, the Ukrainian mobile operator hopes that the rebranding will make the connection between MTS Ukraine and Russia’s MTS less obvious.
Last year, MTS Ukraine reported it was losing subscribers: their number amounted to 21.7 million in March and 20.2 million in late December. The company’s share in Ukrainian market, measured in number of serviced SIM cards, has reduced over a year from 37% to 34%, while the loss of subscribers increased from 6.2% in Q1 to 34.2% in Q4. MTS attributed the fact to Crimea's annexation by Russia last March and the difficult situation in eastern Ukraine. Out of 1.3 million subscribers which MTS Ukraine lost over the past year, about one million were residents of Crimea, with rest of the clients having been lost due to various factors, including the perception of company’s brand, according to Aleksandr Vengranovich, an analyst at the Otkritie Financial Corporation.
To distance the Ukrainian company from the Russian, MTS has changed the scheme of ownership of its Ukrainian subsidiary. Previously, it was directly owned by Russian company, and currently it is owned though Dutch Preludium B.V. and Luxembourg-based Allegretto Holding. Such reorganization was said to have been performed in order to attract investment to MTS Ukraine. Rebranding is viewed as an alternative to reducing a stake in Ukrainian subsidiary, Vedomosti reported, citing the source who spoke of condition of anonymity.
Back in 2001, Vodafone launched a program of introducing its brand to local markets without any additional investment. This scheme is being applied in company’s cooperation with operators in Cyprus, Australia, Belgium, Bulgaria, Iceland, Latvia, Lithuania, Luxembourg, Slovenia, Finland, Croatia, Sweden, Switzerland, and Estonia.