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Russian ICT Market Growing Despite the Crisis According to Frost & Sullivan - For the past decade, the Russian economy has grown at a remarkable pace
Russian ICT Market Growing Despite the Crisis According to Frost & Sullivan

 

PRZOOM - /newswire/ - London, United Kingdom, 2009/02/19 - For the past decade, the Russian economy has grown at a remarkable pace.

   
 
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While the country may be facing a slow-down because of the global financial crisis, at least three key areas in the ICT market continue to look extremely attractive, spurred by government focus, competitive activity and investor interest: broadband Internet; triple play; and mobile services (3G).

"The fact that ICT is a major theme on the Russian government agenda is a key driver for the on going dynamism in the sector," observes Iwona Petruczynik, Frost & Sullivan Research Analyst. In 2001, the government approved three major modernization programs: The Concept of Satellite Communication Development, by 2010; The Concept of Cellular Mobile Communication Development in Russia, also by 2010; and, the one divided into two parts, Electronic Russia for 2002-2010 (eRussia) and the Development of the Common Education Information Space for 2001-2006 (eEducation). "Clearly, these programs, which require major investment, are part way through being implemented and, despite their significant impact to-date, the country still has ways to go," adds Petruczynik

Broadband Internet penetration in Russia stood at less than 10% in 2008. While the increase is significant from 3.2% in 2007, the country still lags far behind Western Europe. "There is plenty of catching up to do," says Petruczynik, "and despite an increase in the price for broadband access, end-user demand is certainly there. As an indication of the level of demand, while the number of personal computers per 100 people jumped from 6.4 to 12.2 between 2002 and 2006, the country saw Internet users grow nine-fold over the same period."

Broadband technologies such as VDSL, HDSL, ADSL2+, and FTTx, provide great investment opportunities in Russia. Moscow, with 50% broadband Internet coverage, uses FTTC technology widely. Other regions are also increasing broadband penetration and are using technologies that include a combination of FTTB, FTTC, and FTTH technologies to deliver services. The need to enhance coverage across rural and lower income segments of the population will be very strong, given the stark contrasts that remain between demographic segments.

Russia is also continuing to push 3G rollout heavily. MegaFon, Russia's third biggest mobile service operator, was the first to launch 3G services in 2007 in St. Petersburg and part of the Leningrad region. In June 2008, the company announced that it would launch 3G in all North Western regions. MTS, the country's biggest mobile operator, added two more cities to its 3G network during 2008 aiming to have 40 cities covered by the end of 2009. Based on the competitive environment and growth potential, we are likely to see further rollout activity, followed by a period of investment in products and services to capitalize on the network infrastructure over the next three years.

TV is another market segment undergoing change in Russia. The Russian government is now focusing on the analogue-to-digital transition for terrestrial TV. Investments in this transition will reach an estimated $12 billion between 2008 and 2015; private investors will provide the bulk of the funds. The main distribution channels for digital TV are likely to be broadband subscriber access networks, based on Data over Cable Service Interface Specification (DOCSIS), ADSL, and Ethernet technologies.

The market opportunities for broadband Internet, 3G and Digital TV are significant; it is likely that Russia will see an upsurge in demand for Triple and Quad Play services as a result. "However, when looking at Russia in terms of technology advancements, it is impossible to disregard the disparity between Moscow, other major cities and the country's rural areas," notes Petruczynik and adds: "Russia's 'Digital Divide' creates enormous opportunities for new entrants in the less well-developed regions, particularly given that competition in the major cities is already intense and costly. However, service providers will need to understand how to align to a different set of economic parameters to serve this market in a profitable, yet affordable manner. Russian service providers would do well to look for best practices from comparable markets, for example in South-East Asia and Latin America."

If you would like to know more about growth opportunities in ICT sector in Russia, please send an email to Joanna Lewandowska, Corporate Communications, at Joanna.lewandowska[.]frost.com with your full name, company name, title, telephone number, company email address, company website, city, state and country. Upon receipt of the above information, the information will be sent to you by email.

GIL 2009 Europe

Frost & Sullivan has expanded its flagship Global Congress on Corporate Growth - GIL Global - into several major cities around the world including London. For the first time ever in Europe, Frost & Sullivan will be hosting the Growth, Innovation and Leadership Congress 'GIL 2009: Europe' on 19-20 May, at the Sofitel St James in London. GIL Global is the industry's only event designed to support senior executives in their efforts to achieve sustainable, top-line growth. To register, obtain a programme agenda, explore sponsorship opportunities, or attend as a member of the media for GIL 2009: Europe, please contact Joanna Lewandowska, Corporate Communications for Frost & Sullivan in Europe, at Joanna.lewandowska[.]frost.com. One-on-One interviews with Frost & Sullivan senior growth consultants are also being scheduled.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents.

 
 
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Russian ICT Market Growing Despite the Crisis According to Frost & Sullivan

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