Biography
Andrey Dubovskov was born in 1966 in the city of Alma-Ata.
Andrey has extensive experience in telecommunications companies: starting his work in 1993, he held a number of senior positions in Millicom International Cellular S.A., Millicom International Cellular B.V., Regional Cellular Communications LLC, 800 CJSC and others companies in Moscow, Almaty, Nizhny Novgorod, Yekaterinburg, Perm and Kyiv.
From 2002 to 2004, he was the General Director of the Tele2 Group company in Nizhny Novgorod.
From 2004 to 2006, he served as director of the MTS branch in Nizhny Novgorod.
In 2006, he was appointed head of the Ural macro-region. At the beginning of 2008, Andrey took over the post of head of the MTS Ukraine business unit.
In 2006-2007, he was director of the macro-region of MTS Ural.
In November 2007, he began working at MTS Ukraine as First Deputy General Director.
Headed the MTS Ukraine business unit since January 2008. The second MTS business unit in terms of revenue, having managed to significantly increase business efficiency and strengthen the company’s position in the market
In March 2011, the MTS Board of Directors appointed Dubovskov to the position of president of MTS OJSC. Andrey Dubovskov replaced Mikhail Shamolin, who served as president since May 2008, as head of the company.
In June 2015, Moscow City Telephone Network (MGTS), a local wireline operator that is part of the MTS group, announced the election of Andrey Dubovskov as chairman of the board of directors of MTS OJSC on June 23, 2015, and as his deputy, vice president for sales and service of MTS OJSC Vadim Savchenko.
In February 2017, the MTS Board of Directors extended the powers of the company's president Andrey Dubovskov until March 2020.
On March 1, 2018, the MTS Board of Directors approved Andrey Dubovskov’s petition for early termination of the powers of the president, chairman of the board of MTS PJSC. On the same day, the Nomination, Remuneration and Corporate Governance Committee under the Board of Directors of AFK Sistema, the controlling shareholder of MTS, recommended that the Board of Directors of AFK Sistema approve Andrey Dubovskov for the position of President of AFK Sistema. The meeting of the Board of Directors of Sistema JSFC is scheduled for March 2, 2018.
Since March 2018 – President of PJSC
Andrey Dubovskov - President, Chairman of the Board of MTS PJSC.
Education
In 1993 he graduated from VGIK. S. A. Gerasimova, majoring in director. There is no information about additional professional education, as well as academic degrees and academic titles.
Labor activity
He began his professional activities immediately after graduating from university. Worked in Russian and foreign telecommunications companies in Moscow, Almaty, Yekaterinburg, Nizhny Novgorod and Perm. He held senior positions in Millicom International Cellular S.A., Regional Cellular Communications LLC, CJSC 800 and others.
In 2002, he was invited to the post of General Director of the Nizhny Novgorod operator of the Tele2 Group.
In 2004, he moved to the position of director of the Nizhny Novgorod branch of Mobile TeleSystems OJSC, where he worked until 2006.
In 2006, he was appointed director of the MTS OJSC Macro Region Ural branch.
In 2007, as the first deputy general director, he began working at Ukrainian Mobile Communications CJSC (since 2010 PrJSC MTS Ukraine), in March 2008 he was approved as the general director of the company.
From 2011 to the present, he has held the positions of President and Chairman of the Board of MTS PJSC. Member of the Strategy Committee and Corporate Governance Committee of the company.
Member of the boards of directors of MTS PJSC and Sistema JSFC.
Chairman of the Board of Directors of PJSC Moscow City Telephone Network, JSC Russian Telephone Company, JLLC Mobile TeleSystems (MTS-Belarus).
He is a member of the supervisory board of PrJSC MTS Ukraine.
On March 1, 2018, the Board of Directors of MTS PJSC granted Andrey Dubovskov’s request for early termination of the powers of the President, Chairman of the Board of MTS PJSC.
On March 2, 2018, the board of directors of AFK Sistema will consider the issue of his appointment as president of the corporation in connection with the transfer of its current head, Mikhail Shamolin, to another position in AFK.
Andrey Dubovskov - about why MTS may leave the New York Stock Exchange, why AFK is in no hurry to sell Detsky Mir and Medsi, how Ozon and the development business will develop
Andrey Dubovskov, President of AFK Sistema /Evgeniy Razumny / Vedomosti
Before taking the presidency AFK Sistema, Andrey Dubovskov headed MTS. Now, managing a diversified investment holding, it is in the mobile operator business that he sees the best platform for creating the businesses of the future. In conversation he often uses the word “synergy”. In an interview with Vedomosti, he explained where Sistema sees complementary businesses and which projects are unlikely to help each other.
Andrey Dubovskov
President of AFK Sistema
Born in 1966 in Almaty. Graduated from the All-Russian State Institute of Cinematography named after. S. A. Gerasimova (VGIK)
General Director of Tele2 in Nizhny Novgorod
Director of the MTS branch in Nizhny Novgorod
Director of the macroregion MTS "Ural"
General Director of MTS Ukraine
President of Mobile Telesystems (MTS)
President of AFK Sistema
– I wouldn’t talk about “stringing”, but in general – about complementarity. In some cases this question is relevant, in others it is not. U AFK Sistema There are already established businesses - for example, Detsky Mir. And there are projects - for example, telemedicine. Both are definitely parts of the corresponding ecosystems (by the way, the term is already, as they say, stuck in our teeth and we hear it with or without reason). So, Detsky Mir is an ecosystem in itself: with its own e-commerce, end-to-end brand, loyalty, etc., etc. And the role MTS may be quite limited. But the telemedicine project with Medsi is more than complementary to MTS (including as a software company), because we have medical big data (with tens of millions of patient visits to our clinics every year) and we have telecommunications big data, where we We know everything, from geolocation to habits. And there is our basic connectivity service. If we combine this knowledge, we can offer something truly breakthrough. We are still making very little money from the telemedicine project. At this stage it is tens of millions of rubles, but this is work for the future.
– Telemedicine is a good link between one large telecom database and another database – a medical one.
– Speaking futurologically, sooner or later the trajectories of old-style telecom and medicine will converge in one direction of movement. Your brain will directly coordinate with the cloud, which will help it work better. This is on the horizon plus 100 years, but still.
– What will telecoms receive money for over the next 5–15 years?
– It’s like asking Bezos in 1994 how he would make money. Here you are now selling books on the Internet. What will you have in 5–15 years?
– There are many businesses in AFK. Is it possible in other businesses to have the same transition as in telecom, when first we paid for minutes, seconds and megabytes, and then we will pay for something else?
– Remember, I said that, from my point of view, telecom is the best, if not ideal, platform for creating the businesses of the future. The answer to your question: no, there is no such thing anymore. Ozon, agriculture, etc. have a different business essence; they will not become a platform for the businesses of the future. But telecom can.
We have been building our portfolio for decades, everything is built according to precedent. And some things are complementary to telecom and the new type of business that will arise on its basis, but some are not. For example, fintech is completely complementary to telecom, or software, or the cloud. But there is no point in attaching offline retail to telecom, hoping to build the business of the future - which, for example, Detsky Mir is strong in.
– How does fintech fit into telecom?
– We are already earning billions from fintech. For example, at scoring. " MTS Bank is now showing good results, including thanks to telecom. We know that the level of collaboration between telecom and fintech competitors is much less serious than that of our bank and our telecom. MTS owns 95% of MTS Bank. This allows us to penetrate deeply into each other’s businesses. Thanks to its competencies in the field of big data analytics, MTS Bank is able to accurately determine the probability of loan repayment, which allows it to formulate proposals that are adequate for itself and beneficial for clients.
– If this is true, then you could reduce interest rates greatly.
- Logical. You think very well, very frontally. But for now the profit " MTS bank" is not as large as we would like. It is calculated in billions of rubles, but it should be in tens of billions. At the same time, MTS big data analytics is a very popular product in the financial market, and Tinkoff has also shown interest, but I don’t know whether its percentage is lower than on the market.
– Different owners – different shareholder approaches. MTS– operating company, AFK – investment company. Now there is only one owner (95 or 100% is not the point), and all tasks are much easier to coordinate. By the way, if MTS Bank were the size of MTS or larger, then we, for example, could consider the possibility of a reverse purchase - buy MTS from the bank’s hand.
- Nothing will happen. Moreover, I have been in the cellular business since 1993, and since the penetration rate approached 100%, the question of leadership in subscribers has become meaningless. Already 15 years ago, it became obvious that the formal size of the subscriber base is not just stupidity, but also a downright harmful metric, because it indirectly provoked endless, meaningless and exhausting competition in retail, which, in turn, reduced margins and threatened dividends and CAPEX of all operators. It’s just that there has always been some kind of witches’ sabbath on this topic, both in the media and in all market research. Even now, in 2019, you ask me this question. Apparently out of habit.
- Did you show your passport?
- No. Cheerful guests from Central Asia stood there.
- This is fraud. We are fighting it and have achieved significant success in this.
– If we look at telecoms, a big change is coming to the market. We are talking about the deal between Rostelecom and Tele2. How will it affect the situation? MTS, on competition, on the “System”?
– From the point of view of the business logic of forming a player who will have both mobile and fixed communications, we ourselves have this. For Rostelecom and Tele2, this is probably the right and logical step. But I don't think this will have any significant impact on MTS. If you have been running a business for a long time and understand all the potential trends and transformations of this market, then there cannot be something that can very seriously affect your existence.
– Is this deal capable of triggering a new price war?
– I don’t think so either.
- Why?
“Because it makes no sense to anyone.” In general, if you are the right leader and owner, then you must understand who will play what, and you must be prepared for this. If you woke up and said: oh, competitors have united, the lid on us or the regulations have changed, what a nightmare, the business has collapsed, etc., etc., then you are in the wrong place.
“I just can’t help but wonder about this question.” Because there is a lot of talk that there are not enough funds for investment. Have you already pledged CAPEX to the sovereign RuNet and to 5G frequencies?
– Telecom has no complexes; the Yarovaya Law was adopted and the development of the telecom industry stopped. This is wrong. Because the issue of data storage, for example, did not arise from scratch. He always stood. The same is true with the sovereign RuNet and with 5G.
– Do you have any complaints against regulators?
– You know, when you talk with foreign colleagues and find out how much resource – primarily financial – is taken up by the “paper” side of the issue, the cost of licenses, etc., you very quickly find the answer to the question why you are traveling from Heathrow to central London and you have interruptions in communication. Our frequency and licensing mechanisms may not be ideally set up, but there is much less financial burden on “papers with signatures and seals,” that is, on the licenses themselves.
– Some time ago there was news about the restructuring of Sistema’s management and the creation of funds. What are these five funds? Have they been created?
– The control system has changed quite a lot compared to the previous model. We now have an institute of managing partners of the corporation. At the moment there are seven of them, and each is responsible for their own piece of the business.
As for funds, this is a slightly different topic. Almost all of these funds originated before our management model changed last year. All these funds are heterogeneous in essence and tasks. Of these, only two are venture capital funds. And the rest do not belong to the strategy that we adopted last spring. The strategy involved a reorientation to the stock structure; it was assumed that we would invest through stock mechanisms. For a certain period of time, we decided that we needed, on the one hand, to share the risks (we had a certain number of unsuccessful stories, they are also known to everyone), and on the other hand, by the spring of last year, against the backdrop of well-known events, we found ourselves in a position of limited investment resources. The practice of the last year has shown that yes, we have some success in our funds and the funds are growing very well. Sistema VC and Sistema Asia Fund have definitely already won their place in the sun - the valuations of these funds have increased significantly, and there are already examples of the first exits with multiple returns. At Sistema Capital, capital under management is actively growing - now this figure is approaching approximately 100 billion rubles. But in general, our funds are not such an explosive growth that we can build a corporation’s business model on it. The scale of investment in the funds is incomparable to investment in the development of our main assets. For example, the construction of a pulp and paper mill in Krasnoyarsk will require, according to preliminary estimates, more than 100 billion rubles. Our private equity assets performed very well last year. They grow by tens or even hundreds of percent. And even telecom. Now telecom shows about 10%, or even more in some specific periods. According to the old international financial reporting standards, in the fourth quarter of 2018, we generally showed a growth rate of almost 12%.
– In recent years, as can be seen from the reporting, Sistema’s share of telecoms in revenue has been declining. It just organically turns out that you are developing other businesses - the same agribusiness, construction business, retail. Do you have targets for how the telecom share should decrease?
– Of course, management has KPIs for our growth rates. But there are no target indicators for the share of this or that business. I am basically against this. Because, you see, when you put such artificial tasks at the forefront, you provoke deceit in assets - in planning, in budgets. Because each of them must grow and develop in accordance with its business logic, with the state of affairs in its market. You cannot speak to business in the language of speculative numbers and then adjust the business to them.
Wide steppe"
– Back in 2015–2017. the agricultural division in the form of the emerging Steppe agricultural holding was the fastest growing business within AFK. However, due to the events of the past year, it seems that the group has suspended development. The company is no longer actively increasing its land bank, the number of M&A transactions has decreased, and the assets of Steppe and RZ Agro, a joint venture, have not been merged AFK Sistema and members of the Louis-Dreyfus family. What is this connected with?
– Our activity in the agricultural sector is very significant. We bought a large cereal packaging business, which allowed us to significantly increase revenue, albeit at a lower profitability, since this business has lower margins. Last year we began to trade independently, including third-party grain. At the same time, in the first year of operation we showed phenomenal results - we entered the top 6 largest agricultural traders in the country. We are also looking at other agricultural segments adjacent to ours.
– The 2018 harvest was the third largest in the history of modern Russia.
– You are in vain linking the good potential of agricultural trading with the scale of the harvest. It is precisely during record harvests that it is more difficult to do high-quality trading than during a poor harvest. Last year, the harvest was not very good - we harvested 112 million tons versus 135 million tons in 2017 (a historical record since the times of the USSR - Vedomosti). The state makes appropriate interventions, etc. Factors of falling or rising prices correlate with the situation on the world market, the balance of supply and demand and other factors.
– What about the plans to increase the land bank to 500,000 hectares?
– Our strategic goal is to increase the land bank to more than 600,000 hectares. We are going according to plan: for example, just a month ago we closed another deal and acquired 11,000 hectares in the Stavropol Territory. In general, a specific figure is all very speculative. We are doing business. And the totality of all inputs interests us in the first place - because the business result is their overall result. It is in no way a derivative of one indicator taken out of context - the size of the land bank, for example. Our entire land bank is geographically and logistically very correctly configured. The climatic zone is very favorable. And the reason for our success in agribusiness is also a balanced approach to the cost of growth rates in general and the speed of increasing the land bank in particular. We have big ambitions. We will be in the top five, in the top three, and in the leaders. And for the land bank as well.
– AFK planned to make Steppe public already in 2019, but apparently it didn’t work out.
– All our leading companies will sooner or later become public.
– When will agribusiness go public?
– The issue of IPO is primarily a matter of business value and market capacity. This will happen when we understand that the business has reached a value that allows us to hope for a successful placement. In addition, there must be willingness and demand from the market and institutional investors. When these two factors come together, then the placement decision will be made.
– General Director of the Russian Direct Investment Fund (RDIF), Kirill Dmitriev, has repeatedly stated his readiness to invest in the Steppe agricultural holding. Perhaps, if it is decided to postpone the public offering, AFK is ready to sell the stake to a strategic investor? In addition, you have the following experience: in 2016, Sistema sold a blocking stake in the largest seller of children's goods, Detsky Mir Group, to the RDIF structure, and a year later the group was successfully listed on the Moscow Exchange.
– We are always in contact with RDIF – they are looking at many of our assets, but it’s too early to talk about specifics. We may understand that our asset is good and strong, but it is important that investors think the same.
To sell or not to sell
– In 2018, the medical division of the corporation, Medsi Group of Companies, showed phenomenal growth - more than 1.5 times to 17.7 billion rubles. Although a few years ago the company lost a contract with Moscow to provide services to officials, which negatively affected its financial results.
- They are great, just great.
– In winter, AFK announced that it was negotiating the sale of 20% of Medsi to a strategic investor. Do you already have specific agreements with someone? Again, RDIF expressed interest.
– Our idea is to sell a stake in the group to a partner, guaranteeing him a very serious upside when bringing the asset to IPO, as happened with Detsky Mir. In principle, this is possible not only with Medsi. But time passes, businesses are growing, as you yourself noted, phenomenally. And the upside is becoming more and more interesting for us every day. For the whole package. In any asset.
– The company needed money to implement Medsi’s strategy – to become a leader in the market of private multidisciplinary medical clinics in Russia with a share of 5% and revenue of over 30 billion rubles?
– Yes, although there are opinions in the corporation that question the need for the sale. By the way, the question also concerns “Children’s World”. Just a year ago, we believed that the right time had come for us as an investor to exit this asset. But now we understand that this is not so. Detsky Mir pays 3–4 billion rubles. dividends annually - and is able to pay more without compromising development, and it retains the potential for growth in value. This is a very stable, high-quality business with very good prospects. It continues to grow, even while remaining within the countries of its presence. In addition to Russia, Detsky Mir successfully opens stores in Kazakhstan and Belarus. Expansion to other geographies is also possible.
– In Russia, the children's goods market is estimated at approximately 500 billion rubles, of which a fifth is Detsky Mir. At the same time, the children's goods market itself is not growing even by 10% per year.
– We will continue to grow by increasing our market share. That is, we have the opportunity for multiple growth simply by expanding our presence in the country: to places where there is no children’s retail yet, or to places where there are competitors, but they are weak. Our second upside is the constantly increasing online sales of Detsky Mir.
– In 2018, although online sales doubled, this was only about 8% of the group’s revenue, or RUB 8.8 billion.
– Yes, but the figure could be higher.
– The general director of Detsky Mir, Vladimir Chirakhov, told us in an interview in the fall of 2018 that the group’s sales via the Internet will grow, but at the same time, growth by the end of 2019 could be halved.
PJSFC Sistema
Financial and industrial group
Shareholders: Vladimir Yevtushenkov (59.2%), about 17.6% is traded on the LSE in the form of GDRs, 14.8% is traded on the Moscow Exchange.
Capitalization (LSE) – $1.3 billion.
Financial indicators (IFRS, 2018):
revenue – 777.4 billion rubles,
net loss – 38.3 billion rubles.
– Seeing the dynamics of online sales for the market as a whole and for our other assets, let me suggest a more ambitious forecast. I think that online sales of Detsky Mir may well become a significant contribution to the development of this wonderful business. At the same time, tectonic changes occur in retail, which can sometimes be difficult to predict.
– So we understand correctly that perhaps you have now changed your mind about selling Detsky Mir?
– I would not make such a statement. I would say this: this year, based on the very good results of all other businesses, we no longer face the obvious need to sell.
– The main reason for the sale of Detsky Mir was the need to reduce AFK’s debt. Over the past year it decreased by only 7 billion rubles. and still remains very large. Why then is the issue of selling Detsky Mir not more pressing?
– This is a combination of factors: sustainable development and excellent financial results of our other businesses, reduction of the debt burden, albeit not so radical, as well as our understanding of how financial institutions treat us, how they fund us and how we conduct other transactions – in pharmaceuticals, development and other industries. All this allows us to now abstract from the “we definitely sell” thesis. This doesn't mean we won't sell. But the balance of these inputs has shifted towards our attempts to think about the feasibility of this again.
Andrey Dubovskov came to MTS in 2004 as director of the branch in Nizhny Novgorod from the Swedish Tele2 group, where he held a similar position. In 2006-2007, Dubovskov managed the MTS Ural macro-region, and then moved to work at MTS Ukraine as first deputy general director. In 2008, he headed the Ukrainian division of the operator.
In April 2011, he was appointed president of MTS instead of Mikhail Shamolin, who moved to the post of president of AFK Sistema (controls MTS). In his new position, Dubovskov was supposed to strengthen MTS’s position in the Russian telecommunications market and create opportunities for further development of the operator’s business. The contract with Dubovskov in this position was extended several times, at the beginning of 2017. The current contract was supposed to be valid until March 2020.
Mikhail Shamolin became president of AFK Sistema in March 2011. Before that, he worked for MTS for six years, successively holding the positions of vice president for sales and subscriber services, director of the MTS Russia business unit and, finally, president of the company. Before MTS, in 2004-2005, Shamolin was the managing director of the ferroalloy business of the Ukrainian corporation Interpipe, and in 1998-2004 he worked at the international consulting company McKinsey&Co. The last time his contract was extended was in March 2017 for three years.
Alexey Kornya has been working at MTS since 2004, holding the positions of financial director of the regional division of MTS Ural, director of the MTS group for business planning, director of controlling, vice president for finance and investments. In June 2016, he became vice president of finance and investments, mergers and acquisitions. Before joining MTS, Kornya worked at North-West Telecom and PricewaterhouseCoopers Audit.
Forge of personnel
Dubovskov will become the third president of MTS to head AFK Sistema. Before Shamolin, this position was held by Leonid Melamed, who headed MTS in 2006-2008.
“Both Shamolin and Dubovskov held their positions for a long time, perhaps they needed rotation, additional motivation,” says Raiffeisenbank analyst Sergei Libin.
The arrival of a person with the experience of such a manager as Shamolin will make it possible to “package” Segezha Group well on the eve of the IPO. For Dubovskov, the move to AFK is a promotion, the expert noted.
Otkritie Capital analyst Alexander Vengranovich believes that leaving the post of president of AFK Sistema was Shamolin’s own decision. “It is unlikely that we are talking about a conflict, since Shamolin remains to work within the perimeter of the group,” he said. According to Vengranovich, after a tense year, which included a lawsuit with Rosneft, the ex-president of Sistema most likely decided to move to a calmer position.
According to senior analyst at Uralsib FC Konstantin Belov, “a change in the head of MTS should not have a serious effect, since the company has a well-built management system.” He believes that Root has “sufficient experience and competence.” Belov expects that changes will occur in Sistema's strategy in the near future, but this is not due to a change in leadership, but to the settlement of the dispute with Rosneft. In June 2017, Rosneft filed a claim against AFK Sistema for the recovery of 170.6 billion rubles. compensation for damage during the reorganization of Bashneft. The Arbitration Court of Bashkortostan upheld the claim, reducing the amount of compensation to 136.3 billion rubles. In December, the company reached a settlement agreement to withdraw mutual claims. Under the terms of the agreement, Sistema will pay Rosneft 100 billion rubles, of which 60 billion rubles. already listed.
Education. In 1993 he graduated from the All-Russian State Institute of Cinematography named after S.A. Gerasimova (VGIK).
Career. As stated in the press release, he has extensive experience working in Russian and foreign telecommunications companies. Since 1993, Andrey Dubovskov has held senior positions in companies such as Millicom International Cellular S.A., Millicom International Cellular B.V., Regional Cellular Communications LLC, CJSC 800 and others in Moscow, Alma-Ata, Nizhny Novgorod and Perm.
In 2002-2004 was the general director of one of the companies of the Tele2 Group in Nizhny Novgorod.
In 2004-2006 served as director of the MTS branch in Nizhny Novgorod. In 2006-2007 was director of the macro-region MTS Ural.
He began working at MTS-Ukraine in December 2007 as First Deputy General Director.
On February 1, 2008, he took the position of acting general director, and on March 28 he was approved as general director.
In March 2018, he was appointed to the post of president and chairman of the board of PJSFC Sistema.
Views and assessments. Andrey Dubovskov replaced MTS-Ukraine as CEO, who had served as head of the company since April 2007, and at the beginning of 2008 accepted an offer to continue working in Moscow as one of the managers of Sitronics (AFK Sistema). According to observers, the next change of top manager was due to dissatisfaction of MTS shareholders with the main performance indicators of its Ukrainian subsidiary.
“I am faced with the task of strengthening our position in the market by introducing interesting tariff offers and services. The topic of quality remains a priority area of our work in 2008 - the amount of funds invested in network development and subscriber service will even be slightly increased compared to 2007 "MTS Ukraine has formed a strong professional team, and I am confident that together we will be able to fulfill our tasks as efficiently as possible and meet the expectations of our subscribers and shareholders," Andrey Dubovskov commented on his appointment.
President of MTS OJSC Leonid Melamed, commenting on personnel changes at MTS-Ukraine, noted: “Andrey Dubovskov previously led the activities of MTS in the Urals, where the company achieved dynamic growth in a fiercely competitive environment (experts call the Russian VimpelCom () the main competitor - ed.). I am convinced that Andrey will be able not only to successfully maintain the high level of achievements of MTS-Ukraine, but also to give the company a new impetus for development."