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. Last Updated: 07/27/2016

Mobile Operators Put Focus on Ease of Payment

MTSubscribers of Mobile TeleSystems, Beeline and Megafon can now settle their phone bills quickly and simply at many ATMs.
When it comes to settling the bill for cellular services, the question "how do I pay?" is becoming almost as important as "how much do I pay?"

As competition in the Moscow cellular market gets fiercer, operators are not only lowering tariffs, they are making it easier for clients to pay their bills by introducing new payment services using automated teller machines, bank transfers and the Internet.

No. 1 Moscow operator Vimpelcom, which operates under the Beeline brand, has made the payment issue one of the main themes of its new advertising campaign, which features the slogan "With Us It's Convenient!"

One of the company's television commercials features a doctor who arrives late for an urgent operation because he had to go to a cellular operator's office to pay for his mobile phone.

The commercial was interpreted by some as a jab at its major competitor -- Mobile TeleSystems, the No. 1 cellular operator nationwide -- which recently lost its leading position in the capital to Vimpelcom.

"There is no comparison with our competitors," Vimpelcom spokesman Mikhail Umarov said. "First of all, we promote our convenience. We need to educate our subscribers and tell them about new convenient and simple methods of payment."

Umarov said Vimpelcom has seen significant growth in the number of payments through its Beepay system, which was introduced last August. It offers payment through ATMs, banks, Sedmoi Kontinent stores and the company's dealers.

Most of the payment options the two companies offer are equivalent, but MTS has so far avoided touting its payment systems through television advertisements.

MTS insists, however, that convenient billing methods and transparency are a priority for the company.

"One of the tasks of management is to make the company transparent for its subscribers from the point of view of customer service and to give them as much information as possible about the company's services," MTS spokesman Kirill Maslentsin said. "The company doesn't have to inform subscribers about payment methods through television commercials. It can do so through call-centers or the Internet, for example."

Vyacheslav Nikolayev, an analyst at Renaissance Capital, disagreed with MTS's assessment.

"Convenient payment methods are a strong competitive advantage. The question is which operator uses them better" to attract clients, Nikolayev said. "Vimpelcom and MTS offer similar payment methods. [But] so far Vimpelcom has obviously advertised their payment options better."

Vimpelcom and MTS clients can pay at the companies' offices or through ATMs, bank transfers or payment machines, which deduct money directly from a client's bank account. Another option offered by both companies is to register their debit or credit card with the operator and make payments via mobile phone, a call center or the Internet.

Major retail banks Avtobank and Pervoye OVK allow payments at their branch offices or ATMs.

Avtobank lets subscribers of MTS, Vimpelcom, Megafon, Moscow Cellular Communications and North-West GSM in St. Petersburg pay for services through its 66 ATMs in Moscow and seven in St. Petersburg using Visa or Europay credit cards. Pervoye OVK offers similar payment services using its 300 ATMs and 50 branch offices in Moscow, but only to Vimpelcom subscribers.

Neither bank charges commission to customers, but operators pay the banks commission.

"For the bank, it's another important step in developing their plastic-card business," said Olga Pershina, spokeswoman for Pervoye OVK.

Guta Bank allows mobile subscribers to make payments through its 44 branches in Moscow and 20 branches in the Moscow region. The service is also available at St. Petersburg and Irkutsk branches, and the bank plans to launch cellular payments in all 21 regions in which it has offices, Guta spokesman Konstantin Burtsev said.

Some 450,000 people a month use this service in the Moscow region, Burtsev said. The bank also offers payment through the Telebank long-distance banking service, accessible via telephone or the Internet.

Besides receiving commission from the operators, the banks see in the payments a way of promoting their other services to those who use the bank to pay for cellular services, Burtsev said.

Meanwhile, Moscow's youngest cellular operator, Sonic Duo, which operates under the Megafon brand, has been increasing its payment options as well. The company's clients can now pay through Guta Bank branches or payment machines.

Megafon subscribers will soon be able to pay for their mobile phones through the CreditPilot system, company spokesman Roman Prokolov said, which will allow clients to buy CreditPilot cards and pay via the Internet or, later, from their mobile phones.

In addition to banks, the Sedmoi Kontinent supermarket chain accepts payments from Vimpelcom subscribers at its 22 stores in Moscow. The chain hopes to attract new customers by offering this service, Sedmoi Kontinent spokesman Valentin Zapevalov said.