Russia Broadband Telecommunications 2007 GIGA
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Transcript of Russia Broadband Telecommunications 2007 GIGA
Broadband Telecommunications
in Russia2007
Introduction to Russian Broadband Access Market
Tuija MäntyrantaSenior Consultant, Project Manager
Finpro Helsinki
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Agenda
• Overview of Russian ICT Markets• Broadband Access Market• Service Providers Landscape• Summary
Overview of ICT Markets
Russia
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Attractive growth market
• The third-largest cellular market in the world• 9th fastest growing broadband market (Source: Ovum,
Sep 2007)
The main telecommunication statistics
2005 2006
Telephone main lines (*000) 42,517 44,642 (31.3%)
Mobile subscribers (m) 125.800 140.0 (98,2%)
Internet users (*000) 18,572 22,384 (15,7%)
Broadband subscribers (*000) 461 884 (0.6%)
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Market Size
• The value of ICT sector in 2006 was about 45 billion USD, from which
• telecommunication markets was about 29 billion USD• IT-markets 14 billion USD and• Postal services 2,1 billion USD
• ICT sector growth in 2006• The mobile communications sector grew 34 percent
and exceeded $10.5 billion• Broadband access showed the largest growth of more
than 42 percent
Source: the Russian Ministry of Information Technologies and Communications (MITC)
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Market Share of different access types
66 %
5 %
29 %
FixedBroadbandWirelessBroadbandDial-up access
Source: IKS Konsulting, 2006
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Peculiarities of Russian markets
• Spectrum shortage - Only 5% of spectrum for civil needs (2004)
• Concentration in megacities• Regional expansion of nationwide operators• The BSA ranks Russia second only to China in
software piracy
Broadband Access Market
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Broadband Access Overview
• Numerous technologies applied in wireless broadband access
• Development is fueled by • Growing demand of broadband Internet access • Comparatively low maturity of access infrastructure• Entrance of new operators who previously applied
other technologies of Internet access
• Factors slowing the development of broadband access market
• The lack of available frequencies• Price limits• Legal basis
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Growing Broadband Market
• Growing at very high rates, • Wireless broadband ~ 61% annual growth• Fixed broadband ~42% annual growth
• Number of new broadband connections exceeded number of dial-up in the whole Russia
• Growth in broadband internet connections is faster in the regions than in Moscow and St. Petersburg
• It is forecasted that the broadband market in Russia in 2007 may be worth USD 1.5-1.7 billion, having grown by 50-70% since 2006
3G networks
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3G Licensing in Russia
• Licensing procedure – by competition (“beauty contest”)
• Total 3 licenses - Each for the entire territory of the Russia
• Price of each license is around $100 000• April 20, 2007: Announcement of the winners of
3G tender of operators activity licensingMegaFon, Mobile TeleSystems (MTS), and VimpelCom
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Challenges for roll-out
• Clear radio frequencies for mobile phone use• Government to authorize 3G equipment for use in
Russia• Clause in the 3G licenses that seriously restricts
their deployment in Moscow
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3G Status in Russia
Operator’s Plans and StatusPlans Time schedule Plans to invest
MTS Launch HSDPA 3G services in the largest cities of Russia
2008: Moscow, St.Petersburg and Novosibirsk 2009: 43 other cities
$1bn over 3 years
VimpelCom Launch 3G services in Moscow
39 regions by the end of 2008
$300-500 mln. In 2007-2008
MegaFon Start construction of its new network
Launched UMTS/ HSDPA NW in St. Petersburg Oct2007Nationwide network
$1bn over 3 years
WiMax
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Overview
• Ideal market for wireless internet – large territory, low density of population, and high expense of building traditional telecom infrastructure
• Often the only option for companies who needed a fast solution at an affordable price
• Legacy fixed-line networks barely support adequate voice services, let alone broadband
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Players with their plans
Service Provider SpectrumGHz
Coverage
Comstar-UTS 2.5 – 2.7 16 regions throughout RussiaMoscow
Golden Telecom Trial in MoscowApplied nationwide license in the 2.5-2.7 GHZ
Enforta 5.2 Services available in 25 cities and plans to launch in additional 8 cities by end of 2007
Summa Telecom 2.5 - 2.7 Plans to launch services in Moscow, St. Petersburg, Samara, Novosibirsk and Vladivostok in November 2007. Nationwide network
Synterra 2.5 – 2.7 Focus on small towns and cities with an average population of 100,000 people.
MetroMax 2.5-2.7, 3.5 and 5.8
28 regions of RussiaJoint venture with MetroMax to bundle with GSM
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Case: Synterra MVNO-based partner model
• Synterra is a WiMAX operator with extensive national backbone and without regional local access
• Expansion plan based around a MVNO-based partner program: The regional companies can operate WiMAX services using Synterra radio frequencies
• Synterra offers wholesale pricing for Internet access to regional operators that have access to local customers and the capital and infrasturcture to launch a networks
• Synterra needs regional operators to fulfill its obligations to the Russian Federal Agency for Education, which awarded a contract to Synterra last year 2006 to connect 53,000 regional schools to the Internet
Wi-Fi
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WiFi (RadioEthernet)
• Most widespread technology in Russia• Main players
• Golden Telecom – largest WiFi network in the world• PROSTOR Telecom• Komstar OTS• FLEX• R.M.Telecom
• Expected service growth• Content rendering• Advertising services• IP-protocol voice transfer through WiFi networks
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Case: Golden Telecom Projects
• “Golden WiFi” project• Concentrated only on Moscow• 7500 hot-spots• 29,200 subscribers (Q2/2007)
• Triple-65 – project: FTTB networks in 65 cities of Russia with a total population of 65 million people, offering broadband access and triple-play services to approximately 65% of the households which dwell in high-rise apartment blocks
Service Providers’ landscape
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Many players – Still very concentrated
• Over 90% assets of the telecom companies are in the hands of four big holding groups
• Over 80% of telecom services are rendered by traditional operators, which own approximately 85% of Russia’s telecom networks
• 85% of the market share of mobile networks is shared by three biggest operators
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Russian Market Structure
Svyazinvest
Regional carriers Rostelekom
Incumbent Carriers
Sistema Holding Telecom Invest Alfa /AltimoHoldings
Sovintel/Golden Telecom
MCC-Alaris Comstar-UTC
Synterra/Comet
VimpelCom MegaFon VimpelComMobile Operators
Art Com NetProvodov.ru Tascom
Enforta Mediaseti Infoseti
BWA/WiMAX Players
Utilities
UES
Gazprom
TTC
Lukoil
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Operators – Mobile operators
Biggest Mobile Operators SubscribersMTS 51 502 016
VimpelCom 48 345 308
MegaFon 30 901 037
Tele2 7 100 000
Uralsvjazinform 4 464 606
SMARTS Group 3 747 774
Sibirtelecom 3 416 608
Nizhegorodskaja telefonnaja svjaz (NCC) 1 276 731
Sotovaja Svjaz MOTIV (Ekaterinburg) 1 170 194
New Telephone Company 863 508
Source: AC & M Consulting
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Largest Wireless Broadband Access Providers
Market Shares by N of subscribers. Reporting statisticsSource: IKS Konsulting, 2006
Others , 53%
Peterstar (SPb), 3%
Komstar OTS, 3%Rosnet, 3%
Golden Telecom, 4%
R.M. Telecom, 5%
Quantum (SPb), 5%
Art Communications, 5%
Tascom, 7%
Enforta, 6%
Flex, 6%
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Summary
• Russia is one of the most diverse and rapidly developing telecom and information technology markets