Market Report, "Russia Telecommunications Report Q3 2011", published

Recently published research from Business Monitor International, "Russia Telecommunications Report Q3 2011", is now available at Fast Market Research
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July 17, 2011 - PRLog -- BMI's Q311 report on Russia's telecommunications industry contains revised forecasts for the country's mobile and broadband subscriber markets, as well as for the first time ARPU forecasts for the major mobile operators through to 2015 and an operator profile for the newly reorganised Rostelecom. Our mobile subscriber forecast incorporates data from all the major mobile network operators through to Q111.

At the end of Q111 Russia had 220.2mn mobile subscribers, equivalent to a penetration rate of less than 155%. In 2010 the Russian mobile subscriber base grew by 5.9%. After experiencing a return to positive subscriber growth in H210, three of Russia's leading network operators - Mobile TeleSystems (MTS), VimpelCom and Tele2 Russia - continued growing positively in Q111. However, MegaFon experienced negative q-o-q growth of 0.26%. Despite Russia's high mobile penetration rate, we maintain our view that positive subscriber growth will continue for the duration of our forecast albeit at a slower rate than that experienced over the past five years.

Full Report Details at

Meanwhile, our revised broadband subscriber forecast for Russia envisages almost 17.2mn broadband subscribers at the end of 2010. This was up from 12.9mn at the end of 2009. Our estimate for Russia's broadband market includes mobile broadband subscribers who connect to the internet through USB modems which we believe has been and will continue to be a major driver of broadband subscriber growth. Further, we expect the construction of a wholesale LTE network to be completed in 2014 and to be a catalyst for mobile broadband growth. With a large number of operators channelling considerable resources into the expansion of broadband networks, BMI expects the cost of broadband services in Russia to fall considerably over the next few years. This will encourage faster subscriber uptake and sustain growth in the sector.

This quarter sees no further changes to our forecast for Russia's fixed-line telephony sector. We estimate that, by the end of 2010, Russia had just over 45.1mn fixed-line subscribers, down by 0.6% year-on-year (y-o-y). With the increasing threat from mobile and VoIP services in Russia, we are forecasting a more pronounced decline in fixed-line subscriptions over the next few years.

Key developments in Russia's telecommunications industry in recent months include the news that an LTE consortium has been created for the construction of a wholesale 4G LTE network to be managed by Yota, on which MTS, VimpelCom, MegaFon and Rostelecom are able to run services. The network is expected to be commercially operational by 2014 in time for the Winter Olympics at Sochi. BMI believes the arrangements are potentially a cost effective means of rolling out next generation mobile broadband in a country that does not have sufficiently high ARPUs for large scale investments and which has challenging geography. However, we are also concerned by the potential for abuse, with state firms involved and the exclusion of Tele2 on questionable grounds up to this point, although the state has allowed an appeal to take place.

This quarter also saw the completion of the reorganisation of Svyazinvest's regional assets under Rostelecom's management. This process has been ongoing for a considerable amount of time, privatisation likely in the medium term. BMI welcomes the reorganisation as a way to generate management and capex synergies. However, we are again concerned that political goals may influence the operation of a larger and more powerful player. Early signs are however positive with Rostelecom's corporate strategy outlining its planned push into the converged services market through the development of broadband and mobile broadband operations, as well as increasing its presence in the pay-TV market.

A slightly lower Industry Rewards score has pushed Russia down from third to fourth position in BMI's latest set of Business Environment Ratings for Central and Eastern Europe (CEE). The weaker Industry Rewards score reflects slower subscriber growth which the mobile operators experienced in Q111 as well as downward pressure on ARPUs.

Partial Table of Contents:

SWOT Analysis
- Russia Mobile Industry SWOT
- Russia Fixed-Line/Internet Industry SWOT
- Russia Political SWOT
- Russia Economic SWOT
- Russia Business Environment SWOT
Business Environment Analysis
- Central And Eastern Europe
- Russia
- Central And Eastern Europe Business Environment Ratings, Q311
Industry Forecast Scenario
- Mobile
- Table: Telecoms Sector - Mobile - Historical Data & Forecasts
- Mobile ARPU
- Table: ARPU - Historical Data & Forecasts
- Fixed Line
- Table: Telecoms Sector - Fixed Line - Historical Data & Forecasts
- Internet
- Table: Telecoms Sector - Internet - Historical Data & Forecasts
Market Data Analysis
- Mobile
- Table: Russian Mobile Market, Q111
- 3G
- Mobile Contract Wins
- Table: Mobile Contract Wins
- Regional Outlook
- Country Outlook
- Table: Selected VAS Services
- Mobile Data
- Russia Mobile Market Overview
- Table 2: MTS
- Table 3: MegaFon
- Table 4: VimpelCom
- Table 5: Tele2
- Fixed Line
- Table: Comparison Of Svyazinvest Regional Companies, December 2008
- Internet
- Table: Total Residential Broadband Subscribers, December 2009-December 2010
- Wireline (Fixed Line And Broadband) Developments
- Table: Wireline Developments, 2009-2011
Regulatory Environment And Industry Developments
- Table: Russia - Regulatory Bodies & Their Responsibilities
- Legislation And Market Liberalisation
- Licensing And Spectrum
- Regulatory Developments
Competitive Landscape
- Competitor Analysis
- Table: Key Players In The Russian Telecoms Sector
Company Monitor
- Samsung
- Table: Samsung CEE 4G Contracts
Operator Profiles
- Svyazinvest (Reorganised see Rostelecom section)
- Rostelecom

Full Table of Contents is available at:

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at

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Tags:Mobile, Subscriber, Broadband, Operators, Spectrum, Gsm, Frequencies, Fixed-line, Mts, Telecommunications
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