...Strong Market Position: PJSC MegaFon is the second-largest mobile operator in Russia by subscribers and revenue. A challenging macro environment in 2015-2016, combined with the entry of T2 RTK Holding (T2R; B+/Negative) in Moscow in October 2015, has put some pressure on mobile operators' revenues and margins. However, we believe that Megafon's market position is sustainable in the long term, supported by the company's strong network coverage, its having the largest spectrum portfolio among peers and its high network quality. Competition Intensified: The Russian mobile market is competitive, with four national facilities-based operators; competition is driven primarily by marketing efforts and the quality of services, rather than by pricing. Competition intensified following the entry of T2R into the Moscow market, the largest and most lucrative market in Russia. The impact of this on MegaFon was moderately negative, with some pressure on average revenue per user (ARPU). We expect the competitive...
