MTS Chases Rivals Into High-Tech Services

Mobile TeleSystems on Monday launched two new services in Moscow in a bid to keep pace with rivals that had beaten it to the punch, introducing both General Packet Radio Service and Multimedia Messaging Service into commercial use.

GPRS allows mobile access to the Internet and MMS lets users send pictures and video and sound files among cellphone handsets and e-mail accounts.

MTS is the last of the country's big three operators, which include Vimpelcom and Megafon, to start paid-for use of the service, even though it started testing GPRS almost three years ago.

"We can see that GPRS is already in demand among our consumers," Mikhail Khanov, MTS's research and development director, told reporters at the SvyazExpocom telecoms exhibition, the largest of its kind in the country, which opened Monday in Moscow.

MTS will charge subscribers 17 cents to 25 cents per megabyte to access the Internet using GPRS, with a sliding scale based on time of day and no monthly fee.

Using GPRS to browse Wireless Application Protocol resources by cellphone will cost $2.99 per month.

MTS amassed about 100,000 GPRS users in its trial period, Khanov said, and he hoped those clients would remain subscribed.

MTS's rivals charge comparable GPRS tariffs.

Vimpelcom, the first to offer GPRS to the public in April 2002, has over 60,000 regular users in Moscow.

Megafon launched its GPRS network in October and says half of its 400,000 Moscow subscribers have used the service at least once. It will offer one promotional month of free GPRS use in June, said the company's spokesman, Roman Prokolov.

Megafon also offers commercial MMS while Vimpelcom is still testing the service.

MTS will charge 30 cents to send one MMS, the company said.

GPRS and MMS are considered value-added services by analysts, who said demand for such capability was in place, but it would take operators a couple of years to reap returns on their infrastructure investments.

"Several hundred thousand cellular users could be potentially interested in using GPRS," said Anton Pogrebinsky, a consultant at ACM Consulting.

MMS, meanwhile, is targeted toward young people, "who as a rule can't afford the handsets supporting MMS," he said. "Once such phones are affordable, the service will have better prospects."

"The demand for value added services is there," said Andrei Bogdanov, an analyst at Alfa Bank, but the companies will have to wait one or two years before those services make up as much as 10 percent of their total revenues.

Building on the Moscow launches, Nokia Networks on Monday announced that MTS will use its equipment to introduce MMS in three regions: St. Petersburg, Krasnodar in the south and Nobosibirsk in Siberia.

Khanov said the launch will come in four to six weeks.