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Russian broadband access market 2010

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Russian broadband access market continues to manifest itself by the high rates of growth. According to preliminary estimates, in 2010 the market volume grew by 30%.

Total number of private subscribers of broadband Internet access at the end of 2010 reached 15 million people - against some 11.3 million in 2009.
The main driver of such growth is the development of networks in the regions.

Broadband Subscribers Growth in Russia, 2005-2011


Source: RusTele.com

Russian Broadband market breakdown by technologies, %


Source: RusTele.com

Provision of broadband services in Russia by means of FTTH / FTTB technology continues to actively evolve. On average nearly half a billion dollars a year had been invested in the construction of fiber-optic networks so far.
In the Central Federal District the level of penetration has already exceeded the xDSL’s, FTTH is still less required by the market and distributed in the country because of its high cost (Russian user is not aware of all the opportunities offered by this technology).
FTTB is also widespread in the county and regional centers of both the North-Western Federal District and Povolzhsky Federal District, even though xDSL still has greater penetration (except for St. Petersburg).
In the north and east of the country FTTH is present, but mostly in a test (pilot) mode. The foregoing is the evidence of the fact that FTTH / FTTB have great prospects and potential for further development.  
In 2010 the market leaders maintained their positions in the ranking. The greatest growth was shown by a national telecom holding company Svyazinvest, which in year-to-year numbers has increased its market share by some 3 percentage points. The substantial growth in subscriber base was shown by ER-Telecom Holding, which grew from a small regional company to somewhat of a greater scale. One of the trends of 2010 on the broadband market has been increasing interest in IPTV. In Russia the segment of digital interactive television is still in the early stages of its formation.

Russian Market Breakdown by subs (households) 2010


Source: companies’ data, RusTele.com

The number of private broadband subscribers in Moscow exceeds 3 million users. Metropolitan area is actually divided among the top 5 telecommunications companies of the region - Comstar UTS, VimpelCom, Akado-Capital, NetByNet, and Qwerty.

Moscow Market Breakdown by subs (households) 2010


Source: companies’ data, RusTele.com

Moscow’s fastest growing operator is NetByNet. Due diligence of the company are: MTS, MegaFon and Rostelecom. According to preliminary estimates, the maximum value of the operator is up to $ 370-380 million net of the debt of $ 20-30 million.

Saint-Petersburg Market Breakdown by subs (households) 2010


Source: companies’ data, RusTele.com

St. Petersburg - the fourth largest city in Europe (population - 4,6 million). The total number of broadband subscribers - 1.3 million households. The penetration rate of broadband access - 71%. The forecast for 2011 - 1.35 million households.
In St. Petersburg operate more than 120 providers of broadband Internet access, but their number gradually decreases due to the acquisition of their networks by large players. In 2011, this trend will become one of the main directions of development of local broadband market.
Level of consolidation is already relatively high. Five leading players account for more than 75% of the market. New subscribers in the market are almost gone. Further development of the sector is constrained by level of PCs penetration.
Market leader is North-Western Telecom (brand Avangard), which uses xDSL technology. The company is actively upgrading its network and already provides services for Triple Play by means of PON technology. According to the results in 2010 NWT’s PON network had 80 000 connected households. Network’s coverage was more than 155,000 households.

Nizhnyi Novgorod Market Breakdown by subs (households) 2010


Source: companies’ data, RusTele.com

Nizhny Novgorod - the fifth most populous city in Russia (1.3 million inhabitants). Located 400 km east of Moscow. Major center of information technology. During the period from 1959 to 1991 the city was shut to foreigners. More than 320 thousand households in Nizhny Novgorod are already connected to broadband. The penetration rate of services is nearly 64%.

Krasnodar Market Breakdown by subs (households) 2010


Source: companies’ data, RusTele.com

Krasnodar is a town in southern Russia. Informally referred to as the "southern capital of Russia". Population - 0.8 million people. Nearly 120 thousand households in Krasnodar are connected to broadband. The penetration rate of services - 48%.

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