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. Last Updated: 07/27/2016

MTS Changes Strategy, Appoints VP

No. 1 cellular operator Mobile TeleSystems is making a fundamental shift in its market strategy -- putting its efforts into customer service -- and has named a former Sonet chief as the company's first vice president.

MTS's board of directors last week appointed Mikhail Susov to deal with the company's business development, marketing, customer service and sales.

"The creation of the position of first vice president for commercial questions is evidence of management's and shareholders' intention to optimize MTS's position in ... relations with its clients," MTS president Mikhail Smirnov said. "It is this direction that is becoming strategic for the company in the near future."

According to analysts, Susov's appointment comes after MTS lost its No. 1 position in Moscow to its main competitor, Vimpelcom. MTS still leads in the number of clients nationwide, with 2.82 million subscribers in early February compared with Vimpelcom's 2.34 million, according to J'son & Partners consulting firm.

MTS's net subscriber additions in Moscow have been low recently due to a high turnover of clients, many of whom switched over to Vimpelcom, analysts said.

Susov, 34, previously worked as general director at cellular operator Sonet from 1996 until December 2001, when he was appointed general director at Comstar, an alternative fixed-line operator. Susov said he was tapped by MTS for his ability to keep the loyalty of Sonet's small subscriber base, which is part of MTS's new strategy.

"A new stage is starting in the development of the cellular market: Technology and price wars are ending and brand competition is beginning," Susov said. "The key factors of success today are an individual approach to subscribers and a properly built system of customer service.

"Such strategy will give us an opportunity to increase our customers' loyalty and prevent the turnover of subscribers," Susov said, adding that by increasing subscribers' loyalty, MTS aims to attract new customers through word of mouth.

Analysts saw the appointment as encouraging news and said the move should ease recent worries over the quality of MTS's services.

"Susov's appointment is likely to be the first in a series of steps aimed at restoring the company's position in Moscow, weakened recently by poor network quality and concerns over billing," said Alexei Yakovitsky, an analyst at UFG.