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. Last Updated: 07/27/2016

MTS Falls Foul of Watchdog Over Misleading Tariff Ads

Government anti-monopoly authorities ordered Mobile TeleSystems to stop violating advertising laws after it inappropriately promoted one of its main tariffs.

The company's Pervy tariff costs subscribers $0.18 in the first minute of a call, not $0.07 as advertised between July and October last year, the Federal Anti-Monopoly Service said in a statement on its web site on Friday.

Information on the tariff that did not include a connection charge was presented in a typeface that was difficult to read and misled consumers about the cost, the regulator said.

Mobile TeleSystems has more than 50 million subscribers in Russia. The Pervy, or "First," tariff has proved one of the most successful price plans the company has introduced, helping it boost revenue in the third quarter by 30 percent to $1.8 billion.

Mobile TeleSystems spokeswoman Yelena Kokhanovskaya said the regulator's final decision would be made Jan. 30.

"If it decides to fine the company, it will cost us 100,000 rubles ($3,762) maximum which, given our sales, is insignificant for the company,'' Kokhanovskaya said.

Kokhanovskaya also said the company might dispute the ruling in court.

A few months after the launch of the tariff, MTS CEO Leonid Melamed attributed better-than-forecast second-quarter results to the new plan. The ruble denomination of the tariff helped the firm, which reports in dollars, link its revenues to the nation's strengthening currency.

(Bloomberg, Reuters)