MegaFon, Russia’s second-largest mobile operator, posted a 45.2 per cent leap in Q1 mobile data revenue, helped by increased 4G network investment and its acquisition of high-speed internet provider Scartel.

“Our significant investments in the development of mobile internet services are paying off,” said Ivan Tavrin, MegaFon’s CEO (pictured).

At RUB16.2 billion ($470 million), mobile data accounted for 25 per cent of total wireless revenue during the first three months of 2014, up from 18.7 per cent during Q1 2013.

The strong mobile data performance helped grow consolidated revenue by 10.6 per cent, to RUB74.8 billion, compared with the same quarter last year.

MegaFon said it expected to grow revenues by 6 to 8 per cent this year

Data growth, however, has come at a cost. MegaFon Q1 capex more than doubled, year-on-year, to RUB8.35 billion. Part of that investment has gone towards launching an LTE-Advanced network during the quarter, capable of theoretical speeds up to 300Mb/s.

Net profit tumbled by 42.7 per cent, to RUB7.2 billion, over the same period.

MegaFon attributed much of the fall to depreciation and amortisation costs, primarily related to last year’s acquisition of Scartel. A weaker rouble, meaning the revaluation of foreign-currency liabilities, also took its toll.

MegaFon commands a steadier ship at an operational level. Operating income before depreciation and amortisation (OIBDA) nudged up 0.4 per cent, to RUB32.5 billion. However, the greater rise in sales meant the OIBDA margin decreased, going from 47.8 per cent (Q1 2013) to 43.4 per cent.

MegaFon’s wireless subscriber base in Russia numbered 67.6 million as of 31 March, up 7.9 per cent from 12 months previously.