We estimate that the Russian telecom market generated Rb1.149bn (US$37.8bn) in service revenue in 2010, a 4.9% year-on-year increase in local currency terms. We forecast that the market will grow at a local currency-denominated CAGR of 4% in the 2010-2015 period, reaching $47.2bn (Rb1.398trn) in 2015, representing a cumulative service revenue opportunity of $256bn (Rb7.716trn) over the same time. While the Russian market was one of the very few that did not show an overall revenue decline in the face of the global downturn, due to strong growth in broadband revenue, other segments of the total revenue pie did not fare as well. Fixed circuit-switched voice revenue suffered a decline in 2009, and we expect this trend to continue in the 2010-2015 period, with a local currency CAGR of -1.4%. For the first time in 2009, the number of fixed access lines declined, with a continuation of this trend in 2010, leading us to believe that this was not a temporary blip caused by the economic crisis but one caused by a more pronounced fixed to mobile substitution.
We forecast that investments in next-generation networks, namely FTTB and LTE, spurred by the operators’ desire to compete with the incumbent on the fixed side, will result in a higher proliferation of total broadband (BB) access, with mobile BB uptake growing exponentially in the past two years following the 3G licensing awards. We expect Russia to become a playing field for fixed-mobile convergence, due to the Russian “Big Three” mobile operators’ (Beeline, MegaFon and MTS) acquisitions and integration of fixed assets.
Table of Contents Executive Summary
Market and Competitor Overview
Russia in a regional context
Economic, demographic and political context
Regulatory environment
Demand profile
Service evolution
Competitive landscape
Major market players
Segment analysis
Mobile services
Fixed services
Pay-TV
Convergence
Identifying Opportunities
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