Online guide to the Russian tech market
Home News Robin Munby

Russian broadband uptake slows

0 29 July 2014

Figures for April 2014 show that the number of users of fixed broadband in Russia rose by a little more than 400,000. According to Telecom Daily General Director Denis Kuskov, this is the lowest quarterly growth in the number of broadband subscribers for the past 2 years. Over the course of 2013 the total subscriber base of Russian internet providers grew by 500,000-600,000 broadband customers per quarter.

The drop in growth for the second quarter of 2014 is confirmed by the figures of iKS-Consulting. In the second quarter of 2014 the number of broadband customers grew by around 1.5% in comparison with the previous quarter, and in the first quarter it grew by around 2% in comparison with the final quarter of 2013. This compares with an average growth of 2.5% per quarter for 2013.

The majority of new clients in 2014 signed up to Rostelecom (around 180,000). The growth in other major operators was between 15,000 and 55,000 subscribers. Rustelecom, as well as Kuskov, attribute this to their broad geographical coverage, which is significantly wider than that of any of their competitors.

Growth has also fallen in the pay-TV market, which is often sold in a package with broadband. In the second quarter of 2014 growth in the number of pay-TV subscribers was around 30% lower than in the previous two quarters. The 500,000 new subscribers represents the lowest figure for the past 3 years.

According to Kuskov, the reason behind the drop in growth in the subscriber base of both of these sectors is one and the same: the saturation of the market in the big cities (those with more than 500,000 inhabitants). In the first quarter of 2014 for the first time more than half of households in Russia were now signed up to broadband, and by the second quarter this rose to 52%. The pace of growth reduced because internet providers’ geographical expansion slowed, and this in turn was due to macroeconomic factors. With limited scope for new uptake in major cities, expansion of networks must come from smaller population centres.

The government project to eliminate digital inequality, which is being implemented by Rostelecom, could stimulate the market, says Kuskov. According to the terms of its 10-year contract with the government, Rostelecom is required to provide access to broadband with a speed of no less than 10Mbps to all communities with a population of 250-500. Rostelecom representative Valery Kostaryev says it will have to build 200,000 kilometres of fibre-optic cables and connect up 13,600 population centres. He continues that if according to 2013 figures Rostelecom’s network connects 18 million households, then in 2018 the figure will be no less than 33 million, with a data transfer speed of at least 100Mbps. 


More on the topic

comments powered by Disqus


via social network

Linked in