MTS to forego M&A in favor of reducing debt amid high interest rates, cut some staff

MOSCOW. Dec 20 (Interfax) - PJSC MTS , Russia's leading mobile provider, has announced a number of measures to optimize costs, citing the Central Bank's tight monetary policy, among other things.

MTS, whose non-telecom business now generates 45% of group revenue, said in a press release that it is transforming into a holding company and spinning off its businesses into separate legal entities.

This "will enhance [the] transparency of the Company's operations, enable faster decision-making in individual businesses and drive a sharper investment focus in a high-key-rate environment," the company said.

"MTS's key objective in the context of tight monetary policy will be to reduce its debt position over the coming year. In 2025, we plan to stay away from cost-intensive M&A deals," Vyacheslav Nikolayev, who has moved from the position of company president to board chairman, said in the press release.

He said the company is also "reducing investments and discontinuing the development of inefficient business streams [...] whose margins and growth potential are not aligned with the Group's strategy."

"We are going to reduce the number of experimental and high-risk investments we make until the macroeconomic environment is more favorable. [...] We continue to digitalize and improve the efficiency of the Company's business processes. At the same time, we are not planning any large-scale staff reductions and expect optimization to affect less than 2% of the Group's employees," Nikolayev said, adding that these measures are expected to enable MTS "to reduce general and administrative expenses thanks to more efficient cost management."