Russia – Telecom
The number of mobile subscriptions has passed 230 million, while
SIM card penetration is high, at around 162% by early 2017. Several mobile
network operators are active, although the market is dominated by four major
operators (MTS, VimpelCom, Tele2 Russia/Rostelecom and MegaFon). These have
expanded their footprints widely through the acquisition of smaller regional
service providers. Tele2 Russia has undergone several changes of ownership in
recent years, becoming a significant player following its merger with
Rostelecom. Competition in the key markets of Moscow and St Petersburg is
fierce, due to the size of the cities’ populations and the higher concentration
of wealth there. Tele2 Russia launched services in Moscow in late 2015 and has
steadily gained market share.
Telcos continue to deploy and modernise fixed-line network
infrastructure to offer improved broadband services as well as a range of
IP-delivered content. The government is investing billions of Rubles in a
200,000km telecom network which will provide a broadband service of at least
10Mb/s to thousands of underserved villages. Rostelecom has been contracted to
undertake and manage the work.
Russia has also emerged as one of Europe’s fastest growing markets
for fibre-based broadband, with Rostelecom’s own fibre broadband access network
covering more than 33 million premises. By the end of 2016 some 60% of the
company’s broadband subscribers were on its fibre infrastructure.
The extensive deployment of LTE infrastructure is supporting
growth opportunities through mobile broadband and data services, which make up
a growing proportion of overall mobile revenue. Investments in carrier
aggregation and LTE-A technologies have further boosted network capabilities,
while operators have also have strategies in place to prepare for 5G. Trials of
5G-based services are expected to be undertaken during the 2018 football World
Cup, to be held in Russia.
2015, data services remained the most rapidly developing segment of the Russian
mobile communications market. In 2015, the Russian mobile data market grew by
around 19%, to RUB 210.0 bn, and the share of mobile data in total wireless
revenues increased from 19.9% in 2014 to 23.7% in 2015. The main drivers for
the data market growth were the increasing adoption of data-enabled devices,
the rapid expansion of 3G/4G networks and the popularity of “data-heavy”
there were approximately 93 m active SIM cards with mobile internet access in
Russia and 52 m unique users. Mobile internet penetration in 2015 reached 64%
against 58% in 2014. Mobile internet users are mainly the owners of smartphones
or tablets. In 2015 the number of active smartphone users in Russia reached
68.2 m (up 28% year-on-year) and the number of tablet users was 13 m (up 26%
year-on-year). According to Google, 85% of smartphone owners use the internet
every day, spending 82% of their time using internet-enabled “apps”.
Broadband Internet Access
in 2015, the
number of broadband subscribers (B2C customers) in Russia grew by 3.6%
year-on-year to 29.9 m. Household penetration of broadband was 54% (up 2 p.p.).
In 2015, the top five internet providers accounted for 67% of the B2C broadband
subscriber base in Russia. Internet providers’ revenues grew 3.2% year-on-year
to RUB 121.1 bn.
The B2C subscriber
base in Moscow comprised 4.2 m customers, while the broadband penetration rate
increased by 2 p.p. year-on-year to 90% . In 2015, the top five internet
providers accounted for 90% of the B2C broadband subscriber base in Moscow.
Russian mobile communications market is characterized by high penetration rates
and intense competition. According to AC&M Consulting, at the end of 2015
the total number of mobile subscribers in Russia totalled 251.9 m, up 4.8%
year-on-year. The average mobile communications penetration rate across Russia
reached 176.3%, while in Moscow and St Petersburg it exceeded 230%. In 2015 the
mobile communications segment accounted for about 58% of the total Russian telecoms
market, although its rate of growth was lower than the market and - in the
prior year (1.2% in 2015 against 1.9% in 2014).