Russian operator group MTS reported improved revenue and profit for the fourth quarter of 2013, but warned of “significant macroeconomic uncertainty and volatility” ahead.

Andrei Dubovskov, MTS president and CEO (pictured), said the group saw a rising voice usage in all of its markets and “strong data adoption” in virtually all customer segments during the period.

Net income attributable to the group was up 16.2 per cent for the fourth quarter at RUB19.8 billion ($545 million). This was on the back of a 6.4 per cent increase in revenue which hit RUB104.8 billion.

Mobile service revenue in Russia was RUB71.6 billion for the fourth quarter, up 8.2 per cent, while net income in the market increased by 16.4 per cent to RUB17.1 billion.

There was growth in Ukraine, which reported revenue of RUB2.4 billion, up 1.8 per cent. The business in Ukraine saw a net income of RUB635.9 million, a 28.1 per cent increase.

Although contributing a smaller share of revenue, Turkmenistan saw an impressive 166 per cent year-on-year increase in revenue to reach RUB71.8 million, leading to a 361 per cent increase in net income to RUB39.2 million.

Armenia was the only market to see a revenue decline with RUB19.8 billion, down 1.4 per cent. This contributed to a RUB1.4 billion net loss, compared to a net income of RUB2.3 billion a year earlier.

For the year as a whole, MTS recorded a net income of RUB79.8 billion (up 169 per cent year-on-year) on revenue of RUB398 billion, up 5.3 per cent.

Dubovskov cited the Ukraine as a cause for concern for the near future, due to macroeconomic factors hurting its ability to grow and its lack of 3G in the market. However he said MTS is confident in its ability to grow in core markets.

During the quarter, MTS went live with its LTE networks in 12 regions in Russia, including St Petersburg, and launched the iPhone 5S and 5C on its retail network.

It also unveiled its 3D strategy in February — encompassing data, differentiation and dividends— in response to concerns about a difficult economic backdrop and lower roaming revenues, which it expects to squeeze voice revenue.

The strategy includes rolling out LTE in 600 cities by the end of 2014 and differentiating the company through its fibre-to-the-home network.

True to its commitment to pay out “a significant portion of its free cash flow” to shareholders, the group paid out a half year dividend of RUB5.2 per ordinary MTS share during the fourth quarter.

For 2014, MTS plans capital expenditure equivalent to 21 per cent of revenue, with key projects including the continued rollout of LTE, enhancements to 3G networks, build-out of 3G in Turkmenistan and network improvements in Ukraine.