MTS enters the event ticketing market

12 February 2018

Moscow, Russia - PJSC MTS (NYSE: MBT, MOEX: MTSS), the leading telecommunications provider in Russia and the CIS, announces the acquisition of a 100% stake in MDTZK LLC (operating under the trademark name Ticketland.ru) and a 78.2% stake in Kulturnaya Sluzhba LLC (operating under the trademark name Ponominalu.ru), the leading players in the Russian event ticketing industry. The acquisitions allow MTS to enter the promising event ticket market and establish itself as a leading ticket operator in Russia, while broadening MTS’s suite of digital services and integrating a key new product into its existing loyalty program and mobile app ecosystem.

Ticketland.ru is one of the country’s favorite destinations for tickets to theaters, concerts and musicals, festivals, classical music performances as well as sporting events and children’s events. It is one of the market leaders in theater ticketing. The company owns the largest distribution network in Moscow and also benefits from active website and mobile app sales channels. Ponominalu.ru is among the TOP-5 players in the event ticket sales market in Russia with the leading position in concert ticketing.

Vyacheslav Nikolaev, Vice President, Marketing, MTS, commented,

"Buying a ticket to a live event – whether it is a concert or a theater production– should absolutely be done through a smartphone. The convenience is too great not to bring these types of services to our customers, and it is obvious that MTS – with its size, scale and scope – should be at the forefront, driving growth in a significant market throughout Russia. On the basis of both Ticketland.ru and Ponominalu.ru, we expect to soon be in a leading position in this intriguing, developing market.”

Online ticketing is a natural complement to MTS’s efforts to expand its core digital services under its 3D strategy. MTS envisions key synergies with online ticketing and its greater ecosystem of MTS services and apps: additional tools for Big Data analytics, channels for customer interaction and marketing activities, as well as simple opportunities to quickly introduce these services to markets throughout Russia. Initially, efforts will be made to promote the entertainment and education aspects of the service to our customers until the services are combined into a comprehensive, e-ticketing solution.

Mr. Nikolaev continued, “Today, MTS delivers a wide range of digital content: TV in various formats, mobile books, music, etc. With the ability to offer tickets to a range of live events, we’ll be able to offer ‘real-life’ experiences as part of our product range and do so with the benefits of discounts through our loyalty program. Within our burgeoning app ecosystem and rising expertise in Big Data uses, our customers will be able to buy tickets directly from their mobile devices and receive personalized recommendations on interesting destinations and events."

The Ticketland.ru transaction was priced at RUB 3.25bln for a 100% stake in MDTZK LLC, including net debt. Ponominalu.ru has been valued at RUB 495 mln for a 100% stake in Kulturnaya Sluzhba LLC, including net debt. Mikhail Minin, the founder and CEO of Pomominalu.ru, will remain with the company and retains a 21.8% stake with an option to sell his stake to MTS expiring in 2020. The parties also entered into option agreements, which would enable MTS increase its share to 100% by the end of 2020 based on key business metrics.

MTS has received all the necessary corporate and regulatory approvals for the transactions. Both ticket operators will continue to operate as separate entities, managed by current management teams, while MTS will oversee strategic development and exercise financial control. The financial results of the acquired assets will be consolidated from the date of acquisition.