In November, 2010 PMR Company reported about Russian telecommunications market and gave “meager forecasts for 2011”. PMR’s analyst Pavel Olzhinska pointed out four relevant tendencies: land-line phone communications stagnation, drawing mobile customers via extra services, sufficient feedback of 3G networks construction and fast growth of ISP segment. A middle of 2011 is the proper time to check the indicators.

Growth drivers’ changes may decrease dynamics

Dynamics decrease of Russian telecommunications market, planned for 2011, is being confirmed. It happens not only due to “post-crisis anemia”, but changes of telecom frameworks (and the owners of some large and medium companies as well).

According to Anna Aybasheva, spokesperson at Vimpelcom, the era of client base rapid growth of “BIG Three” carriers has ended. “Telecom-market model is changing itself: if earlier voice services were the key ones for the carrier’s business, today voice, as a main growth driver, is being replaced by data transmission — both in mobile and fix segments”.

Anna Aybasheva optimistically confirms, that voice traffic within Vimpelcom network does not exceed 25% of the total traffic volume. It seems that a new converged carrier is better the previous two, considering the recent acquisition of Saint Petersburg versatile carrier “Eltel” by “Vimpelcom”.

Absolute market leaders are going to keep enhancing internet access actives, despite the high level of such services penetration in the cities. Every large competitor places expectation on the regions with low internet penetration, but there is also a limited number of subscribers there.

Career center “Unity” proves carriers’ intentions, 3G networks are developing rapidly in the regions. A new turn, a new level of financing has appeared — projects are growing wide and this was followed by demand in personnel“, — Vera Anistsyna, Head of recruitment at career center “Unity” says. She brings an example. A client was a company, working on an equipment erection project in favor of one of mobile carriers across the whole Russia, excluding Far East Region. To realize this large-scale contract in the beginning of 2011 it faced with the lack of qualified engineers.

It is worth mentioning, that small and medium carriers are happy with such market changes. “Revenue forecast of our company for 2011 and the further years is very optimistic: 2010 was signed with mergers and acquisitions and ‘The Big Three’ representatives bought a lot of alternative carriers, and a ‘national champion’ is being formed on the base of ‘Rostelecom’. Market consolidation gives more opportunities for growth and we reckon on the realization of this potential”, — Dmitry Petrov, CEO at “Pirix” carrier, says.

Pavel Gorenkov, CEO at Gars Telecom is satisfied with the situation as well: “According to the previous year result out business has grown by a third. This year we are expecting less active growth, but highly competitive with 2007 year results”.

A spoon of crisis in a barrel of growth

Pavel Gorenkov supposes that average growth rates in the segment of land-line communications will be no higher the previous year indicators. In 2010 we faced with an obvious carriers division by those who kept coping with revenue losses and those who corrected the strategy in the midst of the crisis and was reaping the benefit and growing faster than the market.

Vera Anistsyna points out the trend of “crisis” division of companies according to the manpower dynamics as well. “Up to the beginning of this year companies’ actions were focused on two directions. The ones have straddled the fence, the others were trying to conquer available market shares”.

Another factor, slowing down the telecom market growth — is an “economy syndrome” influencing the company’s activity and its executives’ decisions. According to Dmitry Petrov, crisis has brought them down to earth, taught to think rationally and to plan the company’s development with caution of different critical situations.

But the surplus of wisdom is enough to stop the progress, Pavel Paplinsky, Director for strategic marketing at Orange Business Services Russia & CIS supposes. “The influence of the crisis on the telecommunication market is regarded not in ICT budgets cuts, but in more careful approach to the launch of new ICT projects. Such change in market’s behavior impacts its growth by companies’ investments limitation to the innovation products. This effect seems to continue for quite a long time”.

Roman Davidov, R&D Telecom, agrees that the crisis will maintain its influence. He traces “spirit of crisis” in the business’ desire to save on the expensive telecom-equipment, connect cloud voice services. “But the terms of the market urge the companies to master in the new technologies (call-centers, video conferences), and it requires telecom-infrastructure modernization of an enterprise, — the expert concludes and places expectations for 2012. — I suppose, by the next year consumer market will recover after crisis and a customer’s interest in new technologies of VoIP services will bring a new wave of telecom-equipment and software growth. In its turn, the market of land-line and mobile carriers will drop off”.

About the trends in the name of persons

“Speaking about negative tendencies, first of all, experts point out demand reduction in the segment of land-line voice and data transmission. At the same time mobile communication keeps its positions. The highest drop off is expected in the sphere of land-line voice transmission (approximately by 3% per year) due to long-distance communications. At the same time this segment has directions that may provide growth. They are local phone services and VoIP. They will grow slightly”, — Pavel Paplinsky comments.

His colleague Pavel Gorenkov also highlights further rates decrease and erosion between Moscow and regional prices. Year by year land-line networks are predicted to be replaced by mobile ones. But it hasn’t happened yet. According to the expert, niche products, such as MVNO, still have their audience, and some of them — like converges networks, even have started to grow.

Vimpelcom points at the appearance of infrastructure partnerships, that enable to optimize costs and to raise the effect of investments. For example, this year “The Big Three” carriers have announced a joint project concerning the implementation of mobile communications along “Amur” line. At the same year, according to Anna Aybasheva, the carriers have announced their readiness to collaborate in respect of their transfer to LTE — as part of consortium, as under the contract with “Scartel”.

According to career center “Unity”, one of the common trends is the specialists’ market revival. By salaries estimation we can find out, that the most positions have reached pre-crisis level, — Vera Anistsyna discourses — During crisis as often as not engineer vacancies for 20 thousand rubles were coming out. This means that the proposal won’t be accepted by any reasonable person. Now the situation has changed — the employers have understood that there is no way to save there“.

The thrift is out of fashion

Dmitry Petrov (Pirix) agrees with the representative of career center “Unity”: “Salaries reduction that occurred during the crisis is left behind — job cuts didn’t affect telecom industry substantially. We can say that the situation with market salaries has straightened and returned to pre-crisis level. Speaking about key specialists we can claim that their earnings didn’t go down but stopped growing up within crisis period”.

At the same time the expert complains for the lack of qualified staff — upon today experienced engineers and commercials are in great demand. And Roman Davydov forecasts the development companies’ interest in test engineers. According to him, in terms of the growth of competitiveness on the phone services market, the companies will have to pay much attention to the quality of their products.

Pavel Gorenkov thanks “big brothers” for the professionals they have grown up, but also notes the lack of personnel and a little employee augmentation. “Our team has got a serious support in other carriers’ offshoots. But as for the previous year result total surplus of the company reached only 1%”.

Gars Telecom CEO explains employee turnover by different reasons, underlining that his company has never had a policy of mass redundancy and salaries cut: “Certainly, I can speak only about my company, because we don’t play big politics. As for other market players — I don’t want to handle with gossips. The latest our research in this field dates back to 2010. Our HR-manager analyzed active CVs of our colleagues, published at HeadHunter, and found out that for the Q4 2010 from 50 to 200 employees of such companies as Comstar, Rostelecom, Peterstar, MTT, TTK had been looking for a new job (excluding administrative supply department). The further announcements in Media had completely proved these panic tones”.

It is noteworthy that the other market players are solid at this issue: they never touch salary budget and valuable staff. “We have never realized the economy policy, we have never cut salaries, and as for today the project concerning salaries growth according to market indicators is launched”, — Vimpelcom comments. What do they save on? Here are the popular variants: internal processes optimization (Orange and Pirix), absence of voluntary health insurance — everyone who needs it can buy it for high salary (Gars Telecom), Saas implementation (SME) and so on.