MTS has acquired UK-based Gambit Esports and launched its own eSports division as it looks to attract a younger user base and expand beyond telecoms.
The Russian operator said it wanted to capitalise on the growing popularity of eSports, which sees people compete at online video games.
Financial details of the deal for Gambit, an eSport club with four teams that compete at the likes of Counter-Strike and FIFA, and its parent Praliss Enterprises were not disclosed.
Gambit owns a number of exclusive assets, including the rights to participate in international tournaments, the production of branded clothing and a studio for creating media content such as video tutorials.
It makes money from sponsorship contracts, prizes, sales of brand attributes and digital goods, remuneration for participation in leagues, as well as transfer revenues.
“Our move to the gaming industry was inevitable as we aspire to be on the forefront of working with industries and technology disruptors that challenge, inspire and innovate,” MTS said in a statement.
It cited figures from Superdata Research, which is forecasting the global eSports market will grow from $1.5 billion in 2017 to $2.3 billion in 2020.
Russia is the second largest eSports market in Europe behind Sweden, according to the analyst firm.
The new MTS eSports division will be headed by Irina Semenova, one of the founders of the Virtus.pro team, with Gambit Esports CEO Konstantin "Groove" Pikiner taking on the role of eSports Director.
It plans to help with marketing activities and develop new products, MTS said.
Pikiner said: "Big brands from all over the world, famous sports and entertainment organisations have begun investing in the esports industry, therefore we are glad that Russian companies are not an exception.
“Opportunities provided by one of the leading technological companies will allow us to focus on achieving competitive success and interaction with our audience."