The telecommunication market, despite of crisis, will have continued development in the current year. Almost all sectors will show the growth: local fixed communication, cellular communication, broadband access, services of mobile data transmission.
Financial crisis has thoroughly stirred up the Russian telecommunication market. Large players from the end of the last year reconsider capital expenses for the nearest year. Some scale projects are already frozen; terms of their realization are transferred on 2010. In a number of the companies the employees, salaries and bonuses are reduced.
However, despite of these unpleasant phenomena, Russian telecom in the current year will continue active development. As well as in other hi-tech branches, the question is not about the reduction of volumes of the market but most likely about delay of growth.
Essential braking, meanwhile it is not a recession, waits a segment of local communication. “The Market of local communication showing rates of growth about 10–12% per year, in the crisis period can bring up in the whole only on 2-3%, — considers Stanislav Starikov, the adviser of analytical company J’son&Partners. — Moreover, by 2009 year results the income from the local communication services for the population can show the result below previous year one, that is growth of the market of local communication will occur only due to a corporate segment. It is caused by that ARPU (average revenue per unit, the average income on unit of the user’s equipment. — the Expert) from services of local communication for the population gradually decreases, as with introduction of three tariff plans — unlimited, combined and time — the majority of subscribers in Russia move from unlimited to time and combined, thus reducing the charges on services of a traditional telephony. Increase of tariffs for services of local communication from 1st March, 2009 only can speed up outflow of subscribers from unlimited one to time and combined”.
The segment of services of distant communication will slow; however will not stop to grow. “The Market of distant communication in Russia after demonopolization and with occurrence of new players showed the greatest growth among all services of a traditional telephony: about 14–16% per one year, — Stanislav Starikov continues. — But now there are many ways to make distant calls with the help Internet-services or mobile communication. Calls on internet from a computer to a computer considerably allow saving on distant communication, and the long distance calls by means of mobile communication, for example, in a network of one operator at cost have started to be equated to tariffs of the fixed operators. Taking into account, that the market, as before, will grow due to corporate users, during crisis we expect decrease of rates of growth of a segment of distant communication in Russia up to 4–6%.
The rate on the third generation
One of locomotives of the domestic telecommunication market always was cellular communication. But players of this segment meet the current year with special alarm. Also put here not only in crisis — simply the market of cellular services, first of all voice communication, appeared it is close to saturation.
According to research company ACM Consulting, the number of cellular subscribers in Russia in 2008 has grown on 8,7 % (on 14,96 million subscribers). It is necessary to note, that results of annual statistics were strongly affected with changes in registration policy of “Vympelсom” (“Beeline™”): if earlier this operator counted subscribers of everyone who used paid services even half-year back now border of exception of user’s base became three-monthly term (as a result “Vympelсom” has lost 9,4 million users, having finished the last year in total with loss 3,96 million subscribers). But, strangely enough, numerical growth of user’s base of cellular communication was promoted by crisis: participants of the market speak, that the certain part of subscribers at the end of the last year began to get personal SIM-cards instead of corporate which payment was stopped by the employer. Proceeding rough growth of user’s base results to that the market becomes obviously oversaturated: on the end of the last year the level of penetration of cellular communication in Russia has made almost 130 %. It means, that all population of the country, including old men and children, has on hands on the average 1,3 active SIM-cards.
Glut of the market, and also not so favorable economic conditions, including devaluation of ruble, can result to that in the current year for the first time for all history of existence of cellular communication in Russia the proceeds of “the big three” domestic cellular operators in dollar expression appreciably will fall. It is most pessimistic estimate a situation of analytics of international research company Nomura. Under their forecast, MTS revenue in 2009 in a dollar equivalent will decrease on 11 % (up to 7,09 billion dollars), “Vympelcom” — on 12,1 % (up to 6,55 billion dollars), and “Megaphone” — on 5,7 % (up to 6,8 billion dollars). To tell the truth, already since the next year the revenue will start to grow on 4–10 % per year.
The further development of cellular communication, certainly, is connected with the granting of not-voice services, first of all in the field of mobile data transmission. The basic intrigue here — as far as quickly Russian cellular operators in the current year can develop mobile communication of the third generation (3G). In spite of the fact that earlier the voices of the skeptics did not cease about that in Russia networks 3G won’t claimed, the Russian subscribers actively use these last technological achievements which have widely started to appear in the market in 2008. According to last given to research company ComNews Research, in left year the volume of the 3G traffic in Russia has grown is rather appreciable — in 3,4 times (up to 1,636 Pb). It is connected with that in 2008 the largest Russian operators actively developed networks 3G in regions (“Megaphone” — In Saint Petersburg, In other regions Northwest Federal district, in Dagestan and so forth; “Vympelcom” — In Saint Petersburg, Nizhni Novgorod, Samara, Chelyabinsk; MTS — In Saint Petersburg, Kazan, Novosibirsk, Sochi, Ekaterinburg, Nizhni Novgorod, Norilsk etc.).
However, while there is open a question on terms of the beginning of commercial operation of networks 3G on one of the most tasty markets — in Moscow. Process is broken because of necessities to coordinate compatibility new 3G networks with networks of Ministry of Defence. Representatives of cellular operators declare that researches on compatibility will begin in capital not earlier the nearest May so up to the end of the current year inhabitants of Moscow hardly can take advantage of services on a basis 3G — they will appear only to middle of 2010. And still the most active operators in the near future begin to render services 3G in capital, the truth, in small volumes. But while under the ground: in particular, MTS has begun to test services 3G in the capital underground and promises to begin commercial operation up to the end of 2009.
WiMAX knocks on doors
In 2009 the rigid competition to networks 3G will be entered with other technologies of mobile data transmission. First of all the question is so-called mobile networks WiMAX (them still name mobile networks 4G). Appeal of this technology that, for example, in conditions low buildings of small cities wireless communication can provide high-speed data transmission on distance 5-7 km from base station in a zone of direct visibility and somewhere 2,5–3 kilometers on the reflected signal (for comparison: that Wi-Fi It is capable “to punch” in city no more than several hundreds meters). To launch this year in commercial operation mobile network WiMAX in Moscow, and also in a number of other cities Comstar and Scartel promises. While the appreciable result of application of the given technology is seen only in small settlements. In January of this year the first mobile WiMAX-network In Russia by efforts of the operator of communication “Sinterra” it is started up in commercial operation in Moscow suburbs, in area of settlement Aprelevka. Now any interested person can receive here mobile WiMAX-access to internet (tariffs — average for Moscow suburbs: from 199 rubles for 200 Mb of the traffic). Start of the project in the Moscow area — a part of the program named “Regional WiMAX Mini-networks” which company “Sinterra” realizes in settlements number up to 100 thousand people. In opinion of “Sinterra” topmanagement, first of all sparsely populated cities will be perspective for new wireless technology WiMAX.
“Today the majority Russian WiMAX-operators develops networks of the given standard in large cities, however they already in fastest time will face a serious competition on the part of other kinds of broadband access: ADSL, cable networks, Wi-Fi and, in immediate prospects, networks 3G, — speaks Vitaly Slizen’, ‘Sinterra’ CEO. — Therefore the most effective market of WiMAX wireless access will become the regions described by the lowest penetration of internet access services. Here we expect fast growth of user’s base with good profitableness. Realizing the national project ‘Education’, we were convinced, that in Russia were many white spots in a land infrastructure, and not only on the Far East or in Northern regions, but even, for example, in the Tver area, Moscow suburbs, the Volga region. Thus shares of the population living in small cities and in countryside make 12 and 33 percents accordingly. Wireless access there becomes practically a unique way of maintenance of broadband access to an internet”. Expansion of WiMAX-networks in towns demands rather modest investments that is especially actual in conditions of crisis, Vitaly Slizen’ has emphasized. “Our partner investments — ‘Systems of communications’ company in the launched project of Mini-networks WiMAX in Aprelevka werel 21 thousand euro”, — he has informed.
An access zone expands
One of the most dynamical telecom sectors— the fixed broadband access for change also wait. “The market of broadband access in Russia in the current year will be seriously affected by crisis, annual rate of growth of this segment instead of predicted 35%can make 20%, — considers Grigory Betskov, conducting adviser of company J’son&Partners. — We concern, that large operators of this sector of the market will face sharp falling amount of new connections. As a principal cause significant decrease of marketing publicity expenses and clients’ support will serve. As to average operators’ reduction of marketing charges by them not so strongly will have an effect. However some operators can test financial losses in connection with necessity of returning of bank credits and loans. Well and strategy small providers will be directed on freezing of capital expenses and reception of incomes from already connected subscribers. Though the major part of such companies is based on the private capital and has no obligations to banks and investment funds”.
Growth of number of broadband subscribers encourages participants of the market; however there is also bad news: the average income of the subscriber, ARPU, will fall. Analytics of company J’son&Partners predict, that the amount of domestic broadband connections by the end 2009 will achieve 9,7 million (a gain in comparison with 2008 — 25 %), and in 2010 will be raised up to 14,3 million (moderate-pessimistic scenario) or 12 million (the pessimistic scenario). At the same time ARPU of the broadband access operators will be reduced approximately on 15–20 % per one year (against predicted before 10 %).
Anyway, broadband operators consider that their sector has favorable prospects. “Internet and TV services will be refused by consumers in penultimate turn. From food stuffs in last one. People will need to communicate, — tells Denis Lobanov, Managing director of Akado-Capital. — Certainly, operators of our sector of the telecommunication market should save. But while the question is about the freezing arrogant and capital-intensive projects, instead of the stagnation of a branch in the whole. For example, this year we expected to begin granting services of video on inquiry (Video on Demand), but the decision freeze this project for a while is accepted. I think, we shall return to it as soon as the market will pass the current period of freezing. Our company helps to experience crisis that we up to the end of the last year had time to finish construction of a network practically in all territory of Moscow, and we now have more than one million clients. It is such pillow of safety which allows the company to feel like confidently and to plan for the current year”.
Some participants of the market consider that broadband segment can become the engine of all telecommunication market. “If in the past years the basic driver of growth of the telecommunication market was cellular communication, for the last some years in Russia its penetration has exceeded 100%, and the engine of the market become services of data transmission broadband and paid TV, you see on a level of penetration they essentially lag behind the markets of the advanced countries, — considers Sergey Pridantsev, the president of Open Society Comstar-OTS. — If to speak about the market of broadband access in Moscow rates of growth were slowed down in comparison with the previous years as penetration of these services exceeds 50%, the market is close to saturation. Now in Moscow operators will increase not so much user’s base, how many to combat for the client: to raise quality of services and to introduce new services, for example TV of high clearness HDTV. In regions on the market of services of broadband access the basic federal players have left, universal operators of national scale have appeared. Further large players will consolidate actively small local operators. Shortly formation of large regional holdings will be finished, and everyone will not only work in a segment of corporate clients, but also actively to develop the market of services for private(individual) users”.
One more feature of broadband market is, that in the current year its development in the greater degree will occur due to domestic users as in corporate sector clear recession of activity is expected. “In November of past year we even from shares of sad humor perceived official applications of representatives of business for ostensibly insignificant reductions of the personnel, — notes Pavel Gorenkov, Gars Telekom CEO. — On changes in consumption of the internet-traffic it was obvious, that the companies have reduced not less than 20% of the personnel. And financial organizations sometimes — up to 80%. On the average, on our supervision, for the three last months of the year reduction of the traffic in the markets of two capitals in a corporate segment has made 30%. However today the hysterics has gradually come to naught, and business tries to restore positions. We count, that on decrease of the traffic in a corporate segment the market will achieve a bottom by the end of this winter, and already the nearest autumn growth would have probably begun”.
Now, to overpass heavy times, some operators serving a corporate segment, reduce quotations on the services at times on 40–50 %. “As providers are not interested in outflow of clients, it is especially in corporate sector, they will reduce tariffs. And it as a whole can result in deterioration of service, — Pavel Gorenkov warns. — So in present conditions those operators who as much as possible can reduce of the price at preservation of a degree of service would have won”.