After a small drop in capex to RUB 10.1 billion, the company's free cash flow was up 40 percent from a year earlier to RUB 34.1 billion. Capex for the full year is estimated at RUB 90 billion, and MTS reiterated its intention to also pay out RUB 90 billion in dividends in 2014-15, after RUB 41 billion last year.
MTS' mobile customer base rose 0.8 percent compared to the end of 2013 to 108.67 million at the end of March, led by a 1.0 percent increase in Russia to 76.11 million. Growth in Russia was supported by the launch of the new iPhone and strong tablet sales; total equipment sales were up 8 percent to RUB 6.1 billion. Mobile ARPU In its home market rose 2 percent year-on-year to RUB 299, helped by tariffs to stimulate on-net and internet usage. MOU rose 5 percent to an average 325 minutes per customer, and VAS (incl data) rose to 34.4 percent of ARPU from 31.4 percent a year ago. Total data revenue in Russia increased 42 percent year-on-year to RUB 14.3 billion in Q1.
In the fixed-line market, MTS finished the quarter with 7.426 million customers, down by 37,000 from three months earlier. The operator blamed the drop on the migration of TV customers to digital from analogue, which resulted in some customers on the 'social' package canceling services. The migration to digital and shift to GPON in Moscow helped ARPU rise 5 percent year-on-year to RUB 319. Homes passed increased to 12.347 million from 12.269 million over the same period. Total fixed revenues were down 2 percent year-on-year to RUB 15.2 billion.
