200 Million SIM Cards, and Growing

MTMTS promoters giving away SIM cards in central Moscow. Customers pay 100 rubles, which is put on the account.

The country’s cell phone operators are now servicing nearly 200 million active SIM cards, and while the actual number of customers is half that, companies are giving away free numbers and looking for other ways to win new clients.

There were 199.9 million active SIM cards in Russia as of the end of July, according to AC&M-Consulting. The figure is based on the cards that the operators consider active. For example, MegaFon, VimpelCom and Tele2 only count cards whose owners have made a payment within the past three months, while Mobile TeleSystems goes back half a year.

MTS was servicing 100.15 million SIM cards at the end of July. Of them, 67.9 million were registered in Russia, 17.8 million were in Ukraine, 6.6 million were in Uzbekistan and 4.5 million were in Belarus. A month earlier, the operator had 99.5 million active cards.

If all of the operators excluded customers who have been inactive for three months, there would be 140 million to 145 million active cards in Russia, or roughly one for every person, said Anton Pogrebinsky, a partner at AC&M-Consulting.

In reality, roughly 80 percent to 85 percent of Russians — no more than 121 million — use mobile phones, he said.

If you only consider cards that have been used in the past month, Russia has about 97 million mobile phone users with no more than 114 million cards, said Dmitry Deyev, of MForum Analytics.

Despite the high number of dead SIM cards, the country’s operators are once again distributing free numbers. VimpelCom employees have been seen offering free cards at a Moscow shopping mall, while students have been giving out MTS cards near metro stations.

The MTS promoters aren’t giving away the cards for free, spokeswoman Yelena Kokhanovskaya said. You have to pay at least 100 rubles ($3.20) to receive the card, although the sum is then placed on the new account’s balance, she said.

The promotional program, which MTS began in the second quarter, has been effective so far, Kokhanovskaya said. Some 60 percent of the customers who obtained cards from promoters are still using the MTS service.

The new clients are not bringing in a lot of revenue, she said, but the company didn’t have to spend much to get them, either.

MTS added 2.8 million Russian customers in the second quarter. The average account rose by 5 percent from a quarter earlier, while costs for attracting new clients fell by 9.6 percent in the period.

VimpelCom, Russia’s second-largest operator, also said it was not distributing free SIM cards, although spokeswoman Ksenia Korneyeva said it was possible that their promoters were. The company has not yet released second-quarter results.

Korneyeva said VimpelCom was focused on winning high-quality customers. Even though the market is saturated, mobile phone users can switch operators’ cards to get additional services. A customer might have one card to use in the city, a second to use in the surrounding region and a third for roaming or city-to-city calls, said MTS’s Kokhanovskaya.