RusTele.com

Russian broadband access market 2009

Broadband Internet Access has continued to be the key driver of the telecom market in Russia. Nation-wide ADSL-services have remained one of the fastest growing segments of the broadband market, says the latest information analysis agency’s «Rustele.com» research.

According to RusTele.com data, Svyazinvest’s (Russia's largest telecommunications holding) companies now have over 36% of all dedicated access users in Russia. In 2009 Svyazinvest plans to invest in broadband services development about $1 billion.
Country’s aggregate number of household subscribers rose 50% in 2008, although the growth pace turned out to be slightly softer than expected. The assumption was that the market for household users would double in 2008, reaching 9,6 mln households (according to the Ministry of Telecommunications’ calculations) but this forecast was disrupted by two events that struck Russia during the crisis in the fourth quarter of last year: contraction in solvent household demand, and even more importantly, suspension of construction programs for regional FTTx networks by a number of large operators. For instance, such operators as BeeLine, using acquired brand Corbina, had ambitious plans of building FTTB networks in 65 Russia’s major cities, covering approximately 65% of the country’s population. On the other hand, Comstar-UTS was aiming at building its networks in every town having 200 thousand residents.
The broadband market players tend to render as much services as possible ensuring maximum revenue and stability considering current economic turndown. Another trend is private-corporate segments convergence: household oriented ISPs are tending to include corporate clients, especially from SOHO segment, and those of them who sell its services to the corporate clients are considering the possibility of reaching private subscribers.

Broadband Subscribers Growth in Russia, 2006-2009

Source: RusTele.com

RusTele.com predicts that the number of residential broadband connections will reach 11,5 mln households in 2009.

Speaking of the Russian broadband market regionally, Moscow and St. Petersburg have broadband services penetration level exceeding the threshold of 65%. While in the capital these numbers are gained due to the efforts of a limited number of large operators, St.Petersburg market remains less consolidated. Other regions showed strong demand for broadband services, though its corporate component seem to be insufficient compared to the country’ two biggest cities.

Russian Broadband market breakdown by subscribers number, %

Source: companies’ data, RusTele.com

According to the data available from Internet World Stats web-site Russian is the ninth most popular language among Internet users with 38 million speakers.
In 2009 Russia plans to launch a national domain name .rf – Russian Federation – written in the Cyrillic script instead of Latin. The domain is aimed at raising the importance of Russian as a global language.