Broadband Society is everywhere. We are analyzing
broadband deployment in countries, and in this post we study, in collaboration
with Diana Samarcheva, the case of Russia. It is well known that broadband has a great influence on the social and economic development of the
country. There are a lot of examples proving the force of innovative technologies on the country’s economic
position so the modernization of broadband is one of the main strategic goals
named by the government in Russia.
Fixed Broadband
Penetration (number of subscriptions per 100 inhabitants) in the regions of
Russia and in other counties, 2013
Source: ITU, 2013; Ministry of Telecommunications and Mass
Communications of the Russian Federation
In 2009 Russian president announced that the country
should diversify its economics on the base of new technologies and innovations.
In order to reach the highest worldwide standards Russia established rather
ambitious targets of broadband technologies taking into consideration the
geographic dimensions and low population density. In accordance with the
modernization policy, the Ministry of Communications and Mass Media announced
national broadband targets in 2012 to make 100 Mbps broadband available to 80
percent of Russian residents by 2018, with the ultimate goal to
provide conditions – physically and financially – for affordable broadband access
for all residents of Russia (according to the study).
However, the government faced a great problem – a digital divide. That’s why the most important point in its solving
is the consolidation of all level forces – federal, regional and municipal.
Nevertheless, the problem remains unsolved now because of the big country
dimensions and the socio – economic position of some regions. For example, the
gap between the regions which are considered as leaders such as Moscow and some backward regions such as the Chechen
Republic reaches 285
times.
A digital divide in the case of mobile access is much
smaller. In the Republic
of Tuva, for example, mobile broadband rates are above
average (87.8 active subscriptions per 100 inhabitant). What is more, according to Cisco, 49% of all network devices in Russia
are supposed to have a mobile data connection in 2018. For comparison, the same
indicator in the USA will comprise only 22%, Canada - 20%, France - 29%,
Germany - 32%, Japan – 26%, Italy - 41% and 34% in the Republic of Korea.
So, as we can see, the market of broadband is going to
grow more and more. Further market growth will occur due to the following factors:
•
extensive increase in the geographical coverage and the development of networks
of data transmission;
• the
growing number of devices and their diversity (PCs, laptops, netbooks, tablets,
set-top-box) in the home segment as a consequence of the increase in the bandwidth
per household;
•
increasing the attractiveness of tariff plans, due to complex tariffs.
The major market factors that will ensure the growth
in the number of subscribers, is the extensive growth of the coverage of small
settlements with networks of medium and large Internet service providers.
It is worth noting that the development of mobile
networks on LTE technology doesn’t now have a significant impact on the
development of the fixed Internet access, this technology is distributed mainly
in the regional centers and rather complements the need for a fast Internet
outside the home.
It is needless to say that the average revenue per
user (ARPU)
of broadband tends to stabilize; now providers are guided by the principle “more
Internet for the same money” where instead of reducing the cost of tariffs the
operators try to increase the access speed. The tariff policy of the operators
continues to focus on special tariff offers and package offers that actually
reduce the cost of services separately but retain the total income of the
operator. Thus, the annual increase in the number of home broadband connections
will be a major factor in the growth of the market.
All in all, the top company leaders share two-thirds
of the market in the terms of subscribers (66,2%) and revenues from broadband
services (69%). The undisputed leader is still the company “Rostelecom” with the market share of 35.1% by subscribers and 38.7%
by revenues. The share of other players is gradually decreasing. In terms of
revenue from the home broadband services “ER-Telecom” (10,6%) took the second place and “VimpelCom” took the third place with a share of 8.8% (data for
2014).
The company “Rostelecom” is also the leader in
absolute growth in the subscriber base. Overall, in 2014 the company increased
the number of subscribers to 610 thousands. The company “TransTeleCom” and
“MTS” took the second and third place in this category increasing
its subscriber base by 170 thousand and 160 thousand subscribers respectively.
· -The
increase in the share of bundled offerings in the number of new connections for
Telecom operators; the broadband market is becoming more and more overlapped
with adjacent markets (pay-TV, telephony); The package offers are being created
for better satisfying the needs of subscribers as well as for increasing the
profits of operators from the same client;
·
-The
operators’ priorities are the service quality and the increasing customer
loyalty;
· -The
development of services such as “triple play” and “quadro
play” (Internet, TV, telephony and mobile) and the development of a unified
account for all services, which will encompass multiple devices.
“The market saturation in large and medium cities will
continue to take place in the next two years in the segment of fixed broadband.
The small cities not yet fully covered by fixed access will be the growth
driver of this saturation. The project for eliminating digital inequality which
is being realized with the support of the government will cover remote and
sparsely populated areas which will increase the penetration rate of the
broadband Internet access in the whole country. Additionally, there will be
strong growth in digital consumption: the increase in the required speed of the
Internet access, the increase in the consumption of different services, the
expansion of the list of consumed services and additional services. The adjacent
segments of OTT and IPTV will be fast-growing as the mass construction of optical
access networks and reducing the cost of HDTV-ready and Smart TVs will make it
possible to provide TV service in HD quality and interactive format”, - according
to the words of Maria Florentieva, strategy vice-president of Rostelekom,
M&A and IR.
And now let’s have a look at the
main tendencies on the Russian market of fixed broadband Internet access among
private users:
·
-The growth of high-speed service (100
Mbps and more)
For
the last 2 years, the proportion of users who chose tariff plans with speeds of
100 Mbps or more has doubled. Rates with a speed of 1 Mbps and below is almost
gone, they account for no more than 3% of connections;
-The
growth of video services on the Internet requires more bands for a comfortable
use of the broadband service. In this regard, there is an active dissemination
of optical technologies in the construction of data transmission networks (FTTH,
FTTB
etc.). According to J'son & Partners Consulting, in 2015 the growth of
subscribers of FTTH/B accounted for 12%. ADSL
technology continues to lose ground. So, the 2nd quarter of 2015 showed the
prevalence of an “optical” user over a “copper” user (the company “Rostelecom”),
which clearly shows the obsolescence of ADSL and the gradual withdrawal of this
technology from the Russian broadband market;
Evolution of Broadband technologies in Russia,
2008-2013
Source: TeleGeography’s GlobalComms Database, 2013
· -
The increasing penetration of broadband
access devices and their diversity (Multiscreen)-
A
variety of access devices continues to grow and a gradual replacement of
desktop computers by portable is taking place now. In 2015 in Russia, 53% of
the families used PCs and 63% - laptops. In addition, over the past three years
the average retail price of smartphones and tablet PCs have decreased, even
taking into account the increase in prices in 2015. These devices have become
available for people with almost any level of income, and their sales have
increased significantly. Thus, different family members began to use actively broadband
access from different devices, often simultaneously.
However,
there is always room to
grow. Below we can see the forecast for the main broadband positions for 2020 in Russia.
·
IP
traffic will grow 3-fold from 2015 to 2020, a compound annual growth rate of
25%;
·
Internet traffic will reach 6.3 Exabytes
per month in 2020, up from 2.0 Exabytes per month in 2015;
·
Fixed/Wi-Fi
was 65.7% of total Internet traffic in 2015, and will be 62.8% of total
Internet traffic in 2020;
·
Mobile was 11.4% of total Internet
traffic in 2015, and will be 29.8% of total Internet traffic in 2020;
·
IP
video will be 77% of all IP traffic in 2020, up from 58% in 2015;
·
Ultra
HD will be 11.6% of IP Video traffic in 2020, up from 0.7% in 2015 (128.5%
CAGR);
·
Total
Internet video traffic (business and consumer, combined) will be 75% of all
Internet traffic in 2020, up from 57% in 2015;
·
Internet gaming traffic will reach 4.7
Exabytes per month in 2020, up from 1.1 Exabytes per month in 2015;
·
Mobile
data traffic will reach 1.9 Exabytes per month in 2020, up from 225 Petabytes
per month in 2015;
·
There will be 841.2
million networked devices in 2020, up from 510.4 million in 2015;
·
The
average fixed broadband speed will grow 1.8-fold from 2015 to 2020, from 28.3
Mbps to 50.4 Mbps;
·
The
average FTTx Internet household will generate 131.8 gigabytes of Internet
traffic per month in 2020, 94.4% more than other broadband households.
Despite the broadband technologies are not perfect in
the Russian Federation, they have a really good tendency to grow and develop. We analyze international broadband evolution in
this blog, in Research Group about Digital Journalism and Marketing and
Broadband and in Research Group on Innovative Monetization Systems of Digital
Journalism, Marketing and Tourism (SIMPED), from CECABLE, Escola Università ria Mediterrani of UdG, UPF and Blanquerna-URL, in Twitter (@CECABLEresearch), Google+, in the group of LinkedIn, in the page of LinkedIn, in the group of Facebook, in Instagram (CECABLE), in Pinterest and in this blog. We will go in
deep in the XXII Cable and Broadband Catalonia Congress (4-5
April, 22@, UPF). Go ahead!
A very interesting article. Russia is improving its broadband! Congrats!
ResponderEliminarThank you very much!
ResponderEliminarBonito análisis sobre la banda ancha en un gran paÃs.
ResponderEliminar¡Muchas gracias!
ResponderEliminarGran tarea la vuestra. ¡Enhorabuena!
ResponderEliminar¡Muchas gracias!
ResponderEliminarMuy buena iniciativa la del análisis de la banda ancha por paÃses. ¡Felicidades!
ResponderEliminar¡Muchas gracias! Si tenéis otras sugerencias sobre posibles nuevos contenidos, no dudéis en trasladárnoslas.
ResponderEliminarInteresante la visión internacional sobre el despliegue de la banda ancha. En Rusia también se ponen las pilas. ¡Adelante y a por todas!
ResponderEliminar¡Muchas gracias!
ResponderEliminarEls russos saben que dependran cada cop més de la banda ampla.
ResponderEliminarJa ho pots ben dir!
ResponderEliminarVan avançant força!
ResponderEliminarA bon ritme!
ResponderEliminarFelicidades por estos análisis internacionales.
ResponderEliminar¡Muchas gracias!
ResponderEliminarMolt bona idea la d'analitzar casos de països. Dona una idea molt adient sobre el desenvolupament de la banda ampla internacionalment.
ResponderEliminarMoltes grà cies! Si teniu suggeriments sobre nous objectes d'estudi al blog, indiqueu-nos-ho!
ResponderEliminar