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SSTL Announces Unaudited Financial Results For The First Quarter Ended March 31, 2014

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Sistema Shyam TeleServices Ltd. (SSTL), which operates its telecom services under the MTS brand in India, announces its unaudited consolidated financial results for the first quarter ended March 31, 2014.

Key Financial & Operational Highlights for the First Quarter 2014
 Consolidated revenues increased by 6.4% Q-o-Q to INR 3,188 million (USD 51.6 million), mainly on
account of increase in minutes of usage and data revenues growth.
 Blended mobile ARPU for the quarter increased by 9.8% to INR 107 (USD 1.73) on account of increase
in minutes of usage.
 Minutes of usage increased by 10.9% to 414 during the quarter (Q-o-Q).
 Success of SSTL’s data strategy is evident with non-voice revenues contributing 35.3% of total
quarterly revenues, the highest in the industry. The contribution of Non-voice revenues increased by
87bps during the quarter.
 SSTL’s HSD services now cover over 600 towns across 9 circles.
 Non-Voice revenues grew 9.1% during the quarter. The Company’s data card subscriber base for the
quarter decreased by 4% to 1.29 million subscribers, on account of cleaning up of inactive subscribers.
 Consolidated OIBDA loss for the quarter stands at INR 975 million (USD 15.8 million).

According to Dmitry Shukov, Chief Executive Officer of Sistema Shyam Teleservices Ltd, “During the quarter
our revenues grew by 6.4% Q-o-Q, largely driven by growth in minutes and in non-voice revenues. We also
launched most aggressive data plans in the country to further supplement our 3G PLUS network. We expect
strong momentum in data to continue.”

Dmitry further added “With the new government now in place, we expect greater clarity to emerge on the pricing and subsequent auction of 800MHz”.

Financial summary

INR Million Q1-2014 Q1-2013 Y-o-Y Q4-2013 Q-o-Q
Revenue 3,188 3,520 -9.4% 2,996 6.4%
OIBDA -975 2,113 53.9% -2,081 53.2%
margins -31% -60% 29p.p. -69% 38p.p. 
Net Income -3,162 -6,439 50.9% 4,455 29.0%
margins -99% -183% 84p.p. -149% 50p.p

Revenue in Q1 2014 decreased by 9.4% year-on-year to INR 3,188 million, the decline was largely driven by closure of circles.

SSTL reported an OIBDA loss of INR 975 million for Q1 2014, reflecting an improvement in OIBDA margin by 29% Y-o-Y, margins improved on account of cost optimization, strict control over marketing and other expenditures and also on account of Operational efficiencies. The OIBDA loss for the quarter also includes reversal of estimated provisions for expenses in exit circles on account finalization of liability.

SSTL’s net loss during the quarter reduced by 29% (Q-o-Q). The Net loss reduced mainly due to reversals of estimated provisions and lower interest expenses. SSTL made investments of INR 551 million (USD 8.92 million) during Q1 2014. Debt from banks and financial institutions at the end of 31 st March 2014 stands at INR 36.19 billion (USD 602 million).

Sergey Savchenko, Chief Financial Officer of Sistema Shyam Teleservices Ltd., commented,” Revenue growth along with cost control has helped OIBDA margins to improve further during the quarter. We expect improvement in margins to continue on account of robust growth in data revenues.”

Wahengbam Rorrkychand

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