Dynamics of the Russian market of mobile communication services, billion of rubles

Source: companies’ data, RusTele.com’s estimates and calculations

Russian cellular market by revenue following the results of 2010

Source: RusTele.com

Russian cellular market by revenue 2010, billion of rubles

Source: RusTele.com

In 2010, the mobile market continued to grow rapidly, reaching, according to preliminary estimates the total volume of 707.9 billion rubles. Up to December 2010 more than 219 million active SIM-cards were registered in Russia. The penetration of cellular services in Russia exceeded 150%. At the same time in Moscow and St. Petersburg each resident accounts for more than 2 SIM-cards. The proposed tariffs by domestic operators of cellular communication in absolute terms are often cheaper than those in many European countries.

At the same time, the expenses of subscribers of Russian cellular operators for roaming are very high. In many respects the initiative of the Russian authorities to reduce the cost of roaming is due to this fact. 2010 became the year of rapid development of mobile Internet. Operators providing mobile Internet services, have sold a total of about 8 million USB-modem for wireless access. Also significantly increased the number of smartphones users. In 2011 active development of 3G networks will continue. We note the growing demand for mobile Internet access in major cities as well as in very small towns. By year-end 3G services will be available in all towns with a population of 5000 people. 2010 was marked by tight cooperation of cellular operators and the largest social networks. Especially It a strong trend was the integration of operators’ and social networks’ services (eg, payment for content via SMS). Mobile retail market is gradually recovering, but has not yet reached pre-crisis indicators.

Among the main events of 2010 were:

• In the third quarter of 2010, Vympelcom, the member of «cellular big three» (that is Vympelcom, MTS and Megafon) has conceded to Megaphone its position of second largest cellular operator by number of subscribers and revenues in the Russian cellular market.
• Rostelecom, the company occupying the leading market position in transiting traffic and leasing lines for Russian and foreign operators, acquired CDMA operator SkyLink.
• Another member of «big three», MTS took over Comstar-UTS, a leading fixed-line communications operator in Moscow region.
• MegaFon in June of 2010 announced the acquisition of 100% Synterra shares which makes it a proprietor of its own backbone fiber-optic network with a length of 67 thousand kilometers and allows the company to have access to about 45% of Russian market of carrier access to the Internet.
• Also in Russia the process of "clearing" the frequency bands for the construction of mobile network standard LTE will begin.
• MTS and Megafon have started to implement projects based on technology NFC (Near Field Communication). This technology is designed to ensure the integration of banking (and possibly other payment systems) with the billing systems of mobile operators