Communication (Russian market)

Main article: Russian ICT market

Communications Industry Development Strategy

Main article: Communication Industry Development Strategy in the Russian Federation

Development of 5G networks in Russia

Main article: Development of 5G networks in Russia

Roaming in Russia

Main article: Roaming in Russia

Smartphones and cell phones

• Smartphones (Russian market)
• Cell phones (Russian market)

Special communications in Russia

Main article: Special communications in Russia

Satellite Communications (Russian Market)

Main article: Satellite communication (Russian market)

2024

Telecom operators obliged to report to Roskomnadzor on attracting foreign companies and citizens to work with networks

On April 1, 2024, the Ministry of Justice of the Russian Federation registered the order of the Ministry of Digital Development "On Approval of the Requirements for the Operation of Communication Networks and Communication Network Management in Terms of the Use of Third-Party Services by Telecom Operators."

According to the document published on the official portal of legal acts, the telecommunications operator quarterly, no later than the 15th day of the month, must send to Roskomnadzor  information about foreign organizations and citizens involved in the provision of services and (or) the performance of work related to  the operation and (or) management of its communication network.

From September 1, 2024, telecom operators in Russia must report on attracting foreigners to work on their networks

The provided information about the legal entity participating in the operation of communication networks should contain the full and abbreviated name, registration in the country of origin, the name of the branch and address in the Russian Federation, the decision on accreditation of the representative office in Russia and the list of accounts allocated to a foreign organization for managing communication means, including using remote access tools.

In addition, it follows from the order that the telecom operator must keep information about all actions of its employees and third-party organizations related to the operation of networks, including using remote access, for three years.

This order comes into force on September 1, 2024 and will be valid for six years.

In accordance with the law "On Communications," telecommunications operators must annually submit a report on their activities to Roskomnadzor. The report should contain information about the operator, means and services of communication. In case of non-provision of communication services for more than six months, failure to submit a report or entering false information into it, the license of the telecom operator may be canceled, according to the website of Roskomnadzor.

Order of the Ministry of Digital Development, Communications and Mass Media of the Russian Federation dated 29.02.2024 No. 147 On Approval of Requirements for Operation of Communication Networks and Management of Communication Networks in Terms of Use of Third-Party Services by Telecom Operators

Dmitry Chernyshenko - on the results of infrastructure development in the field of communications in 2023 and plans

Deputy Prime Minister of the Russian Federation Dmitry Chernyshenko on January 31, 2024 at a meeting in the Federation Council (Federation Council) dedicated to the development of infrastructure in the field of communications in the constituent entities of the Russian Federation, spoke about the results of the last year and further directions of work.

Dmitry Chernyshenko shared the results and plans for the development of infrastructure in the field of communications in the constituent entities of the Russian Federation

One of the main indicators of achieving the national goals of digital transformation, which were approved by presidential decree, is associated with the goal of connecting households to broadband access. At the end of the year, it amounted to 86.4%, which is higher than the plan, Chernyshenko noted.

All socially significant objects included in the program in the country are already connected to the Internet. These are more than 115 additional schools, fire departments, feldsher-midwife stations, hospitals, etc. And more than 50 thousand educational organizations, more than 3 thousand election commissions are also provided with the services of a single data network.

More than 26 thousand settlements where up to 500 people live have access to the network, and according to the project to eliminate digital inequality, almost 5 thousand settlements are provided with mobile communications and Internet access.

For 2024, 13.3 billion rubles are provided for budget financing of the program to eliminate digital inequality in the regions. At the same time, Rostelecom President Mikhail Oseevsky recalled that this project is being implemented due to specialized deductions from telecom operators. In 2024, they should collect almost 16 billion rubles. But the budget provides for allocations in the amount of only 13.3 billion rubles for the construction of communication networks in small settlements. This is not enough for the construction of the planned number of base stations, said Mikhail Oseevsky and addressed the first deputy chairman of the Federation Council, head of the Council for the Development of the Digital Economy under the Federation Council, Andrei Turchak, a request to once again apply from the Federation Council to the Ministry of Finance with the need to bring the allocations to the volume that will coincide with the volume of payments from telecom operators.

Andrei Turchak replied that the senators will try to request additional support from the Ministry of Finance of the Russian Federation for the implementation of the project. He instructed the vice-speaker of the upper house Nikolai Zhuravlev to work out this issue and see how much can be added to 13 billion.

Work to eliminate digital inequality is also underway in border settlements, said Dmitry Chernyshenko. In 2023, 125 base stations were installed there by a separate order of the Prime Minister.

And in the reunited territories of the Russian Federation, up to 92% of the territory of settlements is covered with cellular communications, about 1.8 thousand new base stations have been commissioned, 2.38 thousand social facilities are connected to the Internet. A fleet of computer equipment in the amount of more than 35 thousand was also provided. AWS on which domestic software is installed. Rostelecom helps a lot in solving problems in these territories, Rostelecom noted.

Already 35 mass socially significant services in the reunited territories are provided in electronic form as part of the introduction of key subsystems of the federal infrastructure of the federal government. And 155 thousand households, by decision of the president, were equipped with satellite sets for receiving Russian television broadcasting "Russian World." There is a systematic replacement of the operator's equipment inherited from the previous mode.

On behalf of the president, from March to November 2023, systematic work was carried out to create a strategy for the development of the communications industry until 2035, and at the end of 2023 it was approved. The result is a high-quality and well-developed document, says Dmitry Chernyshenko.

This strategy sets two main goals: to provide high-quality communication and Internet access to citizens, business, industry throughout the country and build an information infrastructure based on domestic systems and equipment. They are implemented through 10 initiatives below.

The implementation of the strategy by 2035 should give a significant result, including 98% of households connected to the Internet at a speed of at least 1 Gbps, and the share of citizens living in territories where communication services use 5G technology should be 60%.

The draft detailed action plan based on the strategy is formed by the Ministry of Digital Development. By March 2024, it should be published, says Dmitry Chernyshenko.

On behalf of the president, a step is now being taken, in fact, from the Digital Economy national project to the Data Economy. This is a new national project, which was already defended by the Prime Minister at the end of 2023. And until July 1, it is already required to form it. As of January 2023, passports of federal projects are being formed, which make up the structure of this national project.

Separately, Dmitry Chernyshenko pointed out the importance of developing a grouping of Russian spacecraft, especially in geostationary orbit. 17 such devices are the main link in the infrastructure for building federal digital television broadcasting within the country.

At the same time, in 2030, 8 spacecraft of the Federal State Unitary Enterprise "Space Communications" end their active existence, and this problem was recently raised within the framework of a recent strategic session. In this regard, an order was given to work out alternative mechanisms for financing the project in order to reduce its cost.

In addition, the Ministry of Digital Development was instructed to work out the issue of ensuring communication between new rural settlements with a population of up to 100 people, as well as border settlements, including using satellite communication channels so that at first a minimum threshold for services was available as soon as possible. And in the future, as our groups are put into operation in orbit, it will be possible to increase the speed of data transfer and expand coverage for all settlements.

And, of course, the development of mobile and fixed networks, the connection of social objects, etc. will continue.

Telecom operators criticized the order of the Ministry of Digital Development on unscheduled inspections of Roskomnadzor

On January 16, 2024, it became known that MTS, VimpelCom and MegaFon sent objections to the draft order of the Ministry of Digital Development of the Russian Federation on the introduction of a new "risk indicator for violation of mandatory requirements" in the field of communications. We are talking about expanding the list of situations in which unscheduled inspections by Roskomnadzor and the Prosecutor General's Office are possible.

As of the beginning of 2024, decisions on unscheduled inspections of operators are made on the basis of two indicators. This is a failure to comply with the requirements for blocking prohibited information by technical means of countering threats (TSPU), as well as the appearance of information that the operator offers to connect to the network before its commissioning. According to the Kommersant newspaper, the Ministry of Digital Development proposes to introduce another indicator: the operator rejects more than 5% of applications for number transfer within one month due to incorrect subscriber data. The department says that the largest number of failures in transferring a number is due to problems with information about the subscriber.

However, operators criticize the initiative of the Ministry of Digital Development stating that they cannot affect the share of failures due to data inconsistencies, since they often only find out about this when receiving an application for a number transfer. MegaFon emphasizes that the donor operator does not control the correctness of the establishment of the application for the transfer of the number by the recipient operator. In addition, industry participants indicate that when personal data changes, the operator does not receive information about this either from the subscriber or from state information systems.

In general, as noted, "the share of refusals of more than 5% of the total number of applications within one calendar month will be for all telecom operators." Therefore, it is proposed to increase the threshold value to 20%. An analyst at the profile Telegram channel abloud62 Aleksei Boyko also considers the idea Ministry of Digital Development controversial: in his opinion, the operator "cannot control in any way - in some month the share of motivated refusals in MNP will be more than in another month."^[1]

2023

Growth of turnover of telecom operators by 9.7% to 2.6 trillion rubles

The turnover telecommunication of companies Russia in 2023 reached 2.6 trillion, rubles which is 9.7% more than a year earlier. Such data Rosstat were released in February 2024.

According to Interfax, citing materials from the department, in December 2023 the turnover of telecom operators reached 270.2 billion rubles, which is 16% more than a year ago, and also 20.2% higher than the result of November 2022.

As the publication "Business Petersburg" writes with reference to analysts and market participants, the volume of Russian telecom is steadily growing by 2-5%, which is facilitated by such segments as mobile Internet, voice communication, joining and passing traffic. Andrey Guk, General Director of OBIT, names other catalysts for industry growth:

First, the state is actively investing in new infrastructure products where the telecommunications component is needed. Secondly, many Western companies and vendors have left, which forces Russian business to modernize its telecommunications infrastructure.

At the same time, the broadband Internet access (broadband access) market has nowhere to grow, there is a high rotation of subscribers, Guk believes. In his opinion, broadband access operators need to look for new niches.

This point of view was also supported by the general director of the telecommunications company "Comfortel" Dmitry Petrov. According to him, the volume of Russian telecom is growing mainly due to higher tariffs, as well as the emergence of new services. Old technologies and services used by the older generation are gradually leaving, and modern technologies come in their place. They open up new opportunities and space for players, he added in a conversation with the publication.^[2]

More than 17 billion rubles will be invested in communications in the north of Russia

At the end of December 2023, Prime Minister Mikhail Mishustin approved long-term plans for the integrated socio-economic development of 16 Far Eastern cities until 2030. Among other things, the documents signed by the Chairman of the Government of the Russian Federation say about the planned costs of communication.

In total, more than 17 billion rubles will be spent on the development of telecommunications in the North. The funds will be used to connect remote settlements in Yakutia, the Magadan Region and the Chukotka Autonomous Okrug to the Internet. Moreover, in Yakutia we are talking about the implementation of the socially oriented project "Synergy of the Arctic." In Magadan and Chukotka, no "special projects" are indicated.

According to the Telegram channel "Telekommunalka," in total in 2024-2027. 11.3 billion rubles will go to Yakutia for the development of communications, 294.2 million rubles to the Magadan region, 5.8 billion rubles to the Chukotka Autonomous Okrug. The funds will come from the federal budget, as well as from the consolidated budget of the subjects. It is not planned to attract extrabudgetary sources.

On January 10, 2024, the governor of Chukotka, Vladislav Kuznetsov, at a meeting with Russian President Vladimir Putin, said that the regional government had developed a roadmap that would provide JSC with good communication and the Internet by 2026.

And since you said that you need to develop the Internet in general in Chukotka, then (Minister of Digital Development Maksut) Shadayev and I worked and are close to signing a roadmap for the development of the Internet in the Bilibin agglomeration. We will connect to Yakutia, by 2026 we will have the Internet in the part that will allow the vacated satellite resources to redistribute and make good communication with the Internet throughout the Chukotka Autonomous Okrug, RIA Novosti quotes Kuznetsov.

Government of the Russian Federation Resolution of December 29, 2023 No. 4073-r

"Rostelecom" increases by 10% the tariffs for the passage of traffic for operators. Communication in Russia will rise in price

At the end of November 2023, it became known about the order of the Ministry of Digital Development to increase the maximum prices for interconnection and traffic passing services provided by Rostelecom. As a result, communication in Russia will rise in price. Read more here.

Chernyshenko: Within the framework of the new national project "Data Economics," the development of communication systems is envisaged

The development of communication systems is provided for in the new national project "Data Economics," which will replace the national project "Digital Economy." This was announced on October 24, 2023 by Deputy Prime Minister Dmitry Chernyshenko. Read more here.

The State Duma decided to increase the cost of new licenses for communication services 130 times

The State Duma of Russia approved in the first reading a bill proposing amendments to the Tax Code of the Russian Federation, which, in turn, provide for an increase in the cost of obtaining a license for telecommunication services from 7.5 thousand rubles. up to 1 million rubles, i.e. more than 130 times. Information about this with TAdviser on September 22, 2023 was shared in the press service of the State Duma deputy RFAnton Nemkin. Thus, it is proposed to solve the problem of unscrupulous operators who do not comply with the requirements for SORM.

In particular, the bill affects services, for the provision of which telecom operators must install equipment that ensures the functioning of the Operational-Search Measures System (SORM). Licenses, including for fixed, long-distance and cellular telephone communications, as well as for Internet access and data transmission, fall under such services. The change should come into force on January 1, 2024.

The main meaning of the bill is to stop the practice in which the cost of obtaining a new license is significantly lower than the amount of the current fine for administrative violations regarding the integration of SORM, as a result of which unscrupulous operators, by obtaining a new license, avoid paying the fine. In particular, fines of 3 million rubles were issued for violation of SORM requirements for the first half of 2022. At the same time, the amount of such fines, according to the Code of Administrative Offenses, ranges from 300 thousand rubles. up to 500 thousand rubles, for repeated violation - from 2 million rubles. up to 6 million rubles.

Indeed, a widespread situation in which it is much easier for violators to obtain a new license than to fulfill debt obligations, says Anton Nemkin, a member of the State Duma Committee on Information Policy, Information Technology and Communications.

"Let me remind you that in 2021, operators were issued 2.36 thousand new licenses for communication services, while 1.15 thousand licenses were terminated," the deputy said.

In addition, in his opinion, there is a problem of introducing SORM equipment. Thus, the cost of integrating the necessary equipment varies depending on the amount of traffic going and the data transfer rate. For example, at a speed of 6-10 Gbps, the price ranges from 4 million rubles to 7.5 million.

"I note that this cost covers the costs of installation, commissioning and storage services. It turns out a situation when both payment of fines and the issue of introducing equipment, even from an economic point of view, turns out to be an unprofitable strategy. The low cost of the license allows you not to comply with the current legislation, "explained Anton Nemkin.

The establishment of the license bar is commensurate with the cost of existing fines and the cost of introducing equipment, according to the deputy, will resolve the problem and, ultimately, lead to a decrease in the number of unscrupulous operators.

"Of course, there is a problem in which young companies simply do not physically have the necessary resources to install equipment. Let me remind you that we have a service for introducing SORM without paying for it - outsetting. In fact, rent with a monthly fee from 55 to 110 thousand rubles, "the parliamentarian added.

The Ministry of Digital Development told about how communication is developing in the LPR, DPR, Kherson and Zaporizhzhya regions

On September 7, 2023, the Ministry of Digital Development told about how communication is developing in the LPR, DPR, Kherson and Zaporizhzhya regions. According to the head of the department Maksut Shadayev, more than 1.8 thousand base stations have been deployed in new regions. By the end of 2023, this figure should grow to 2558 units, and by the beginning of March 2024 - to exceed 2.7 thousand pieces of equipment.

The Minister of Digital Development, Communications and Mass Media of the Russian Federation also said that by the beginning of September 2023, 2.6 thousand regional authorities and local governments, municipal institutions were connected to broadband Internet access services in the LPR, DPR, Kherson and Zaporizhzhya regions, including more than 1.4 thousand schools and institutions of secondary vocational education. Until March 1, 2024, according to Shadayev, it is planned to connect more than 7.5 thousand objects. In addition, by the end of 2023, it is expected to supply more than 35 thousand computers with pre-installed software for regional authorities and local governments, as well as municipal institutions.

Next year [2024], we must complete the introduction of GIS "My School," ensure the complete digitalization of the construction block, complete the implementation of the system in regional health care, housing and communal services... In 2025, the introduction of InformSystems in the field of transport, state technical supervision and management of sports institutions should be completed, - said Maksut Shadayev.

Earlier in 2023, it became known that Vivacell-MTS and MirTelecom will receive frequencies for cellular communications in the territories of the DPR and LPR, as a result of which each of the four new regions of Russia will have three cellular operators. Each of the four operators in the respective regions will have frequencies for all three generations of cellular communications: GSM (second generation), UMTS (third generation, 3G) and LTE (fourth generation, 4G).^[3]

The Ministry of Digital Development will simplify the placement of communication networks on state facilities for operators

Telecommunications operators in Russia will simplify the placement of communication networks at state facilities. This is stated in the published Ministry of Digital Development of the Russian Federation Strategy for the Development of the Communications Industry until 2035. The corresponding project was published in August 2023.

As TASS writes with reference to the Ministry of Digital Development document, costs can be reduced, in particular, by introducing preferential tariffs for telecom operators for the placement of communication facilities at facilities in state and municipal ownership, as well as facilities created at the expense or with the involvement of budget funds. In addition, this goal can be achieved by ensuring the free placement of communication networks and access to them by operators in apartment buildings (the exception here is the payment of electricity consumed by the telecom operator).

At the same time, the ministry proposes to introduce preferential access for data center operators to power grids and preferential tariffs for paying for electricity consumed, as well as introduce a preferential tariff for operators for technological connection of certain categories of facilities and limiting the maximum level of tariffs for technological connection to power supply facilities.

In addition, the Ministry of Digital Development wants to achieve the removal of administrative barriers and ensure non-discriminatory access to the spatially distributed linear infrastructure of related industries, such as supports, poles and sewers, in the framework of, in particular, projects for the construction and modernization of roads and railways, pipelines, and electricity networks.^[4]

An analyst at the profile Telegram channel abloud62 Aleksei Boyko notes that the state infrastructure is numerous and, as a rule, has a suitable number of storeys to accommodate base stations. According to the expert, the placement on it is also convenient for operators because it is possible to conclude contracts not with individual owners of premises, but in bulk.

The Ministry of Digital Development will allow operators to raise communication prices above inflation

The Ministry of Digital Development, Communications and Mass Media of the Russian Federation will allow telecommunications operators to raise communication prices above inflation. This was reported in the department of the Strategy for the Development of the Russian Communications Industry until 2035, published in August 2023.

As Kommersant writes with reference to this document, telecom companies will be able to raise communication tariffs above inflation if they reinvest a significant part of the additional profit received in significant projects for the development of communication networks, the development of new technologies aimed at achieving the goals of the strategy.

The Ministry of Digital Development notes that in order to "provide high-quality, modern and competitive communication services and access to the Internet" for Russian citizens, businesses and the state in the industry, it is necessary to increase the investment capabilities of operators. Therefore, additional sources of funding are needed, with the help of which you can cover the costs of "modernization, development of communication networks, as well as the introduction of new generations of communication technologies" - 5G and in the future 6G - and to maintain the existing infrastructure.

One of the sources of funding may be the annual indexation of tariffs for communication services. At the same time, the approach to determining the size of permissible indexation should be differentiated and dependent on the goals of using the telecom operator additionally extracted (thanks to the indexation of tariffs) profit, the strategy says.

On August 11, 2023, the head of the Ministry of Digital Development Maksut Shadayev said that the ministry, together with the Federal Antimonopoly Service (FAS), is developing a mechanism according to which telecom operators will have to justify the planned tariff increase.

Earlier in 2023, the largest telecom operators complained Ministry of Digital Development about a sharp increase in the cost of connecting communication equipment to electric networks, warning of an increase in tariffs for subscribers and a decrease in the pace of network construction.^[5]

The Digital Code is being created in Russia to regulate the communications industry

The Strategy for the Development of the Russian Communications Industry until 2035 includes the Digital Code for regulating relations in the field of communications and information and communication technologies (ICT). This was announced on August 15, 2023 by Interfax with reference to this document. Read more here.

The Ministry of Digital Development of the Russian Federation collects data from regional telecom operators to check the stability of communications

In early August 2023, it became known that the Ministry of Digital Development requested data from small regional telecom operators on their networks and subscriber bases. This is necessary to assess the robustness of data transmission infrastructures in order to subsequently assign a specific criticality category to networks.

According to Kommersant the newspaper "," the department sends letters to telecommunications companies demanding to transfer information about the services provided, the availability of trunk and regional communication systems, the number of corporate and state clients, as well as the number of connected operators. Such notifications, in particular, were received by companies from, Moscow,, Tomsk, and Novosibirsk Sverdlovsk Saratov Tver regions,,,,, and Adygea Krasnodar Territory LPR other DPR regions.

The requirement to disclose information is justified by the need to "identify significant telecom operators, on which the stable functioning of communication services and the state of network stability and security depend." By the beginning of August 2023, there are about 5 thousand regional telecom operators in Russia. The requested data will allow them to be checked for compliance with the necessary categories under the law on the protection of critical information infrastructure (CII).

Depending on the criticality category, safety requirements are formed. At the same time, underestimating the degree of categorization of objects threatens operators with fines. In particular, for officials, the recovery ranges from 10 thousand rubles to 50 thousand rubles, and for legal entities - from 50 thousand rubles to 100 thousand rubles. For repeated violation, the amount of the fine is doubled.

Market participants believe that checks regarding the categorization of telecom operators according to the requirements of the CII are dictated by ongoing attacks on infrastructure and the need to strengthen its security in the current geopolitical situation.^[6]

Khinshtein: 10 thousand telecom operators in Russia are a lot, so the requirements for them will be tightened

On July 27, 2023, Alexander Khinshtein, Chairman of the State Duma Committee on Information Policy, Information Technology and Communications, announced that the number of telecom operators in Russia is excessive, and therefore the requirements for their activities will be tightened.

According to Khinshtein, by the end of July 2023, approximately 10 thousand telecom operators are operating in the Russian Federation. At the same time, the irresponsible behavior of a number of small players leads to a deterioration in the information security situation and provokes an increase in the level of cybercrime. Therefore, with the participation of the Ministry of Digital Development of the Russian Federation, measures are being worked out to strengthen control in the telecommunications industry.

We believe that the existing unprecedentedly high level of cybercrime, including telephone fraud and everything related to this, is the result of a large number of unscrupulous small players on the market who are deliberately created in advance, not to provide communication services, but to make money on semi-criminal business. Various methods, schemes, virtual PBXs and the like are created, "Khinshtein quotes Interfax.

The initiative plans to increase fines for telecom operators for non-compliance with the requirements of the law. Tightening the requirements is necessary so that each market participant "really understands his responsibility." As an example, Khinshtein cited the law on increasing the cost of a license for telecom operators from 7.5 thousand to 1 million rubles (adopted in the first reading in January 2023).

In general, we need to put things in order in the field of telecom operators. Only with a ruble we will force business, industry, and this does not apply to communication, but to all areas without exception, to comply with the requirements of the law. It should be economically profitable, "concluded Hinstein.[7]

The Ministry of Digital Development of the Russian Federation will oblige telecom operators to share infrastructure along federal highways

In mid-June 2023, it is known about the decision of the Ministry of Digital Development of the Russian Federation to force Russian telecom operators to share infrastructure in the country along federal highways. According to the head of the department Maksut Shadayev, telecommunications companies in Russia will cover more than 80% of federal highways with their networks by 2024.

In addition, telecom operators at their own expense will complete the creation of 4G networks in all settlements with a population of more than 1 thousand people in 2024. Shadayev explained that covering more routes in the Russian Federation rests on a key barrier to creating infrastructure along the roads - this is the very cost of connecting base stations to electricity. The total connection price can be tens of times the cost of the base station itself.

Maksut Shadayev asked Russian President Vladimir Putin to instruct regional leaders, according to which they will have to provide technical conditions for connecting base stations along the routes to electricity. Shadayev also proposed using a radio frequency spectrum fee to motivate operators who conduct the Internet to small settlements in the country. Due to the fact that suspension of communication lines on power line supports is an effective way to build communication infrastructure, but unreasonable tariffs for the use of this infrastructure sometimes surprise even experienced experts in the industry.

According to the Ministry of Digital Development of the Russian Federation, as of June 2023, more than 87 million people use the Internet in Russia every day. However, settlements remain from 500 to 1 thousand people, where it is not profitable for a telecom operator to go from the point of view of economic laws. The Ministry of Digital Development of the Russian Federation Maksut Shadayev proposed that the amount of investments of operators reduce the spectrum fee for the accelerated construction of communication networks in such settlements.

Russian President Vladimir Putin instructed the Government of the Russian Federation to consider the issue of tariffs for conducting operator networks along the highways. The instruction also speaks of finding a middle ground between budget financing and tariff increases, where this is justified.

According to Mikhail Seslavinsky, Deputy General Director of the Yuesem Holding Company, so that this de facto national project does not undermine the economic foundations of our telecommunications infrastructure, a public-private partnership is certainly necessary. The main vector of its functioning should be the creation of favorable financial and economic conditions. Social obligations and the burden imposed on Russian telecom operators require comprehensive support from the Government of the Russian Federation, and in this regard we fully support the instructions given by the President of Russia. Since April 2023, telecom operators in Russia, together with the Ministry of Digital Development of the Russian Federation, have been working out a roadmap for equipping federal roads with mobile communications.^[8]

Telecom operators complained about expensive access to infrastructure

At the end of May 2023, the Association of Small Operators of Russia (AMOR, unites 50 communication providers) sent a letter to the presidential administration, Prime Minister Mikhail Mishustin, State Duma Chairman Vyacheslav Volodin and Head of the Ministry of Digital Science Maksut Shadayev, complaining about the increase in the cost of access to the infrastructure of telecommunication networks.

As Kommersant writes with reference to this document, until 2023, in the tariffs of PJSC Rosseti Moskovsky Region for the service of providing mounting places for placing an optical cable, the unit of calculations was one support, but then the organization changed the wording "for one support per month" to "for one wire on the support per month." As a result, the cost of access has multiplied depending on the number of cables connected to one support.

When placing four cables on one support, the cost of providing Internet services increases fourfold, and when placing ten cables - by an order of magnitude, a representative of VNET (works in Moscow and the Moscow region) specified to the newspaper.

The main problem is with a monopolistically high and economically unfounded current tariff for accommodation services, when paying for each cable, and not for support, more than 50% of the revenue from the subscriber will go towards paying for services for placing networks on supports, he said.

To maintain the current level of profitability, small telecom operators will have to increase the cost of services, shifting the increase in costs to subscribers, adds MForum analyst Aleksei Boyko. If the model of service provision ceases to be profitable, the operator will be forced to curtail the provision of Internet services in many settlements, which is unacceptable, the expert emphasized.

The Ministry of Digital Development at the end of May 2023 said that the agency "is already dealing with the issue," since artificial overpricing of access to infrastructure can limit the development of communication networks in remote regions.^[9]

Trunk telecom networks in Russia are 75% loaded

The main part of the main fiber-optic communication lines (FOCL) was built in 1995-2005 and is already loaded by more than 75%. This is stated in the "Strategy for the Development of the Telecom Industry until 2035," which the Ministry of Digital Development of the Russian Federation has developed together with the largest telecom operators. The Kommersant newspaper refers to this document in the issue of May 23, 2023. Read more here.

The Ministry of Digital Development named the number of telecom operators working in Russia

By mid-January 2023, about 23 thousand licenses of telecom operators are valid in Russia, they are issued by more than 10.5 thousand legal entities. This was announced by the deputy head of the Ministry of Finance Dmitry Kim during a meeting of the Committee on Budget and Taxes in the State Duma.

According to him, Ministry of Digital Development considers it necessary to tighten work with operator licenses. The department is trying to keep the principles of retaliation. As Kim noted, by mid-January 2023, the first fine for violation of the installation of means of providing operational-search measures to legal entities ranges from 300 to 500 thousand rubles, and for repeated violation - from 2 to 6 million rubles, while the cost of operator licenses in the Russian Federation - 7.5 thousand rubles.

What we now see: unscrupulous market participant - over the past year, Roskomnadzor found these violations of about 400, issued the appropriate fines, and 396 licenses - the operators themselves refused them. And on the same day they filed for re-obtaining a license, now this is in no way regulated. And first of all, our bill is aimed at tightening and excluding such events, - said Deputy Head of the Ministry of Digital Development.

On January 18, 2023, the State Duma will submit for consideration a bill submitted by the government on a significant increase in the amount of state duty for the provision of a license for communication services. The document increases from January 1, 2024 to a million rubles from 7.5 thousand rubles the amount of the state duty for "granting a license to carry out activities in the field of providing a communication service related to compliance with the licensing requirement for communication networks and means of communication for operational-search measures."

This initiative was developed in pursuance of the instructions of the President of the Russian Federation Vladimir Putin to prevent unscrupulous telecom operators from entering the telecommunications services market who do not comply with the mandatory licensing requirements regarding the introduction of an operational-search system (SORM).^[10]

2022

Over 10 years, the share of the telecom industry in Russian GDP has halved

The share of the telecommunications industry in the domestic gross product (GDP) of Russia in 2022 decreased to 0.8% from 1.6% in 2012. Thus, we are talking about a twofold reduction in the indicator for 10 years. This follows from the draft government decree on amendments to the state program "Information Society" developed by the Ministry of Digital Development. The document was published in August 2023.

According to the Ministry of Digital Development, the volume of the telecommunications market in Russia in 2022 amounted to 1.81 trillion rubles. The annual dynamics of the market was positive and amounted to 2.8% in comparable prices (according to Rosstat). In the structure of the Russian telecommunications market, the largest share (about 45%) was occupied by mobile services, including Internet access through mobile networks.

The volume of the Russian market for access to the Internet through fixed and mobile networks as a whole in 2022 is estimated at 598.8 billion rubles, of which 76.6% (459 billion rubles) accounted for the share of services provided to the population.

The Ministry of Digital Development gives a positive forecast for the further development of the ICT sphere, noting, however, that in the current geopolitical situation, Russian government bodies and budgetary organizations, key industry enterprises and systemically important credit organizations face cyber attacks every day; higher probability of exploiting vulnerabilities and undeclared capabilities of untrusted ICTs.

In 2023-2026, despite external negative factors and conditions of increased uncertainty, telecom operators are planning further investment activities aimed at ensuring the sustainable functioning of communication networks, providing high-speed fixed and wireless Internet access, developing the market for commercial data storage and processing centers and the cloud services market, and the possible introduction of new, especially domestic, communication technologies, the document says.

On Amendments to Section I "Strategic Priorities in the Implementation of the State Program of the Russian Federation" Information Society "

Telecom industry revenues for the year increased by 3.1% despite sanctions

At the end of 2022, revenues from telecommunications services amounted to 1.8 trillion rubles. Such information was shared with TAdviser on July 18, 2023 by representatives of the Institute for Statistical Research and Knowledge Economics of the Higher School of Economics. Annual income growth (3.1%) is comparable to the level of 2017 (3.2%).

According to HSE IIEZ experts, such industry results could not be achieved in previous crises. So, when the Russian economy was under the influence of the first wave of sanctions, in 2015 and 2016. revenues in telecom practically did not grow and even decreased. During the period of coronavirus restrictions in 2020 and 2021, the growth in the telecommunications market was within 1.5-2.5% (Chart 1).

In 2022, the growth of the industry's income was provided primarily due to an increase in tariffs for telecommunications services for the population (+ 6.8%), which, however, was half as much as the increase in prices as a whole in the economy (13.8% according to the consumer price index). For legal entities, tariffs for the year practically did not change (+ 0.3%). As a result, the annual increase in income from services provided to these consumer groups amounted to + 4.4% and + 1.6%, respectively, and the industry received more than 53% of income from individuals, experts calculated.

When considering the internal dynamics, it can be seen that the fourth quarter was the most productive for the industry - both in terms of the absolute volume of revenues received (482 billion rubles) and when comparing its results with the corresponding period in 2021 (Chart 2). After the slowdown in industry development observed in the second and third quarters, when income growth fluctuated at the level of 2%, there were signs of industry adaptation to the changes in external and internal conditions of the development of the Russian economy that occurred at the beginning of 2022.

According to ISIEZ HSE, almost all telecom segments showed positive results in terms of income.

The most significant income item of the industry is mobile telephone services. In 2022, they brought in 462.6 billion rubles, which is 1.8% higher than the previous year (Chart 3). The increase was achieved despite the weakening demand from consumers: voice mobile traffic decreased by 5.4% compared to 2021. As a result, the share of mobile services in the telecom revenue structure decreased to 25.6% (-0.3 pp).

Segments mobile and: fixed internet 8.6% and 4.2%, respectively, showed a noticeably higher increase in income in the crisis year. The share of these services in the total revenue of the industry increased to 19.7% (+ 1.0 pp) and 13.5% (+ 0.1 pp). Such dynamics was supported by the expansion of the subscriber base (the number of mobile broadband access subscribers to the Internet increased by 2.2%, fixed - by 3.3%) and the growth in demand for relevant services (mobile internet traffic increased by 19.6%, - fixed by 16.9%).

In 2022, the spheres of broadcasting, satellite communications, and the provision of other telecommunications services added in income. Their shares in the structure of industry revenues amounted to 6.3% (+ 0.1 pp), 1.1% (-0.02 pp) and 26.9% (-0.3 pp), respectively.

The lowest dynamics was traditionally shown by fixed telephone communications: revenues in it fell by 4.6% (against the background of a 16.4% decrease in the duration of outgoing telephone connections). At the end of the year, the share of this segment in telecom revenues decreased to 6.9% (-0.6 pp), according to the report of the ISIEZ HSE.

The growing volume of funds received from the telecommunications market falls on an increasing number of organizations operating in this type of activity. So, at the end of 2022, according to SPARK-Interfax"," 9.2 thousand legal entities operated in the industry, while in 2015 there were almost twice as many - 17.4 thousand. Mainly small ones leave the telecom services market - Internetproviders those operating in local markets and providing fixed access services to the network. At the same time, since 2020, there has been a tendency to reduce the rate of decline in companies, which, first of all, is associated with a decrease in the number of liquidated legal entities. The number of established organizations in the telecom services market has been declining for at least the past seven years (Chart 4).

According to the results of 2022, the geographical concentration of the industry has also intensified. Thus, 24% of specialized companies are registered in Moscow, 8% in the Moscow region, 7% in St. Petersburg, 3% each in the Sverdlovsk region and the Krasnodar Territory. In total, 45% of telecom organizations are concentrated in these five regions.

In a crisis situation, market players are increasing their presence in the leading regions of the country, which can be seen by the coefficient of relative growth in the number of organizations. If in general in the telecommunications industry this figure is − 4.9, then in these regions (with the exception of the Sverdlovsk region) its values ​ ​ are higher and are in the range from − 4.2 to − 3.0, indicated in the ISIEZ HSE.

The HSE ISIEZ report on the development of the telecom industry in 2022 was based on: calculations according to the Russian Ministry of Digital Science, SPARK-Interfax; results of the project "Monitoring digital business transformation" of the thematic plan of research work provided for by the State Task of the Higher School of Economics.^[11]

Market growth by 1.5%, up to 1.8 trillion rubles

The Russian telecommunications market in 2022 reached a volume exceeding 1.8 trillion rubles, which is 1.5% more than a year earlier. These growth rates were among the lowest in recent years, according to a study by TMT Consulting.

So, in 2021, the market grew by 3.5%, in 2019 - by 2.6%, in 2018 - by 3.3%. In 2020, the figure was only 0.5%.

According to analysts, in 2022, the mobile market, which forms 59% of the industry's revenue, traditionally became the key driver of telecom market growth. At the same time, the dynamics continued to decline in such significant segments as fixed broadband Internet access (broadband access) and pay TV: the growth rate of the subscriber base of both markets was insignificant, and the increase in tariffs was significantly offset by the further spread of package offers.

According to the report of TMT Consulting, by the end of 2022, the number of subscribers (active SIM-cards) of mobile communications in Russia decreased by 0.9% to 256 million, approaching the level of 2019 (260 million). Penetration was 175%. In absolute terms, the subscriber base decreased by 2 million.

This is not the first case of a decline - it previously happened in 2018 and 2020. Operators changed priorities from recruiting new customers to increasing loyalty and average check from existing customers, and the decrease was also due to the write-off of some subscribers due to the execution of 533-FZ.

Mobile revenues rose 3.5% in 2022 against 5.0% the previous year. The main growth factor was the increase in tariffs and the increase in consumption of additional services, which ensured an increase in revenue in both the V2S and V2V segments.

Broadband Internet penetration in 2022 was 62%. The subscriber base grew by 0.3%, revenues - by 0.5%. In the B2C segment, small growth was maintained by the introduction of new housing and private sector coverage in the suburbs of large cities. In the V2V segment, the market volume was negatively affected by the completion of the third stage of the state project for connecting the SZO.

The growth of the pay TV market has almost stopped: the number of users increased only in the first quarter, then, under the influence of sanctions (which resulted in the withdrawal of many foreign TV channels from the Russian market, blocking foreign satellites, problems with the supply of telecom equipment), the subscriber base was reduced, reaching the end of 2021.

Revenues increased by 0.7%, the average subscriber account (ARPU) increased by 1 ruble to 193 rubles compared to 2021. The rise in the average bill was primarily due to higher tariffs: many operators increased the cost of the service, and this was done mainly in the second half of the year. The growth of ARPU was also facilitated by the development of VoD (video-on-demand) services by all major players through their own and partner online cinemas. On the other hand, the market was negatively affected, in addition to package offers, by the shares conducted by satellite operators and new economical tariffs.

The volume of the fixed telephone market in 2022 decreased by 8.5% and amounted to 80.2 billion rubles. The number of subscribers (OTA) decreased by 7.9% compared to 2021 to 18.1 million. Revenues in the V2S segment traditionally fall at an accelerated pace, the penetration of the service decreased over the year by 3 percentage points. up to 22%.

In 2023, TMT Consulting expects telecom market growth to remain close to 2022. The key factor in the growth of revenue from communication services, according to researchers, remains the tariff policy of operators: the dynamics of 2023 will be positively affected by the increase in tariffs carried out during 2022 in both the V2S and V2V segments; tariffs on individual services can also be expected to be revised in 2023.

Russian Telecommunications Market - 2022

Ministry of Digital Development has shifted the timing of providing federal highways with mobile communications by a year

At the end of November 2022, it became known about the deadlines postponed for the year, during which telecommunications operators must launch mobile communications on federal highways.

Indeed, when extending frequencies via LTE, they provided for the obligation of operators to build and provide communication with all federal highways by 2024. But given the current situation, we are shifting this burden for a year. We hope that by 2025 they will definitely do it, - said the head of the Ministry of Digital Science Maksut Shadayev.

The minister recalled that in 2022 a law was adopted that introduces the principle of general use of base stations by all operators.

When base stations are located in places with low population density, they will be required to provide support to subscribers of all operators. This is very important. It doesn't matter which operator I connect to the base station, in this sense I can use its resources, "Shadayev said.

According to Rossiyskaya Gazeta, by mid-2022, at least the latest roads were equipped with stable communications in Russia. According to the representative of Avtodor, there is a connection along the entire highway of the Moscow-St. Petersburg M-11. The highway under construction M-12 Moscow - Kazan will also be provided with communication.

On other tracks, according to the reviews of auto tourists, difficulties arise. The main problem is that in some areas, even in the Moscow region, some operators do not have Internet communication, telephone communication also happens intermittently. Meanwhile, a traveler by car wants to know whether there will be a service on the highway, including the possibility of Internet communication, said Sergey Lobarev, president of the National Association of Auto Tourism and Caravanning. Communication on the road is an element of security. In addition, the ability to promptly send messages in instant messengers, social networks is important for promoting routes, attracting tourists.

However, the criteria for the availability of services, including the presence of a stable connection, are not taken into account when developing routes for auto tourism. Rosturizm positions auto-directorates rather than routes, Lobarev notes. Earlier, the department presented 133 routes for road travel.^[12]

3G standard operation will remain at least until 2027

The work of the 3G communication standard will remain in large cities until at least 2025, and in the regions of the country - until 2027, the Ministry of Digital Development said in October 2022.

Earlier, operators planned to complete the main transfer of frequencies of this standard for 4G by 2025. But the deterrent remains the availability of equipment amid supply problems and a slowdown in customer replacement of devices. Experts believe that operators are waiting for the supply of domestic 4G equipment, which should begin in 2023. The quality of communication, they note, is unlikely to deteriorate due to the delay, but it will not be possible to increase it.

In the Chelyabinsk region allocated 8 million rubles for the development of communication networks in small settlements

In the Chelyabinsk region, an additional 8 million rubles were allocated from the regional budget for the development of communication networks in small settlements. This was announced on September 9, 2022 by the Ministry of Digital Development of the Chelyabinsk region. Read more here.

Telecom operators may be obliged to store information about calls from replacement numbers twice as long

On August 3, 2022, it became known that the Russian authorities plan to oblige telecom operators to store information about calls from replacement numbers twice as long. As a result, it can lead to additional costs from the operators themselves.

At the beginning of August 2022, the storage period for such data is six months. It is spelled out in the amendments to the law "On Communications," adopted on July 2, 2021. These changes make it mandatory to block calls and SMS messages coming from abroad from replacement phone numbers. The same document prescribes the mandatory connection of operators to the Roskomnadzor system to control the process of blocking such calls and messages. Disobedience threatens operators with a fine of up to 1 million rubles.

The Ministry of Digital Development proposes to increase the shelf life of information about blocked numbers. The agency has prepared a draft decree of the Government of the Russian Federation, which states the need to store these data during the year. The document is published on the federal portal of regulatory legal acts. If adopted, it will enter into force in 2023 and will be valid for six years. The increase in the storage period is dictated by the "need to find the source of fraudulent calls," the ministry told the publication.

The draft resolution published Ministry of Digital Development makes several changes to the algorithms for overseeing calls and messages from fake numbers. In particular, it involves the transfer of the system created by Roskomnadzor under the control of the Federal State Unitary Enterprise "Main Radio Frequency Center" (GRCC). This is an institution subordinate to Roskomnadzor.

After the entry into force of the draft resolution, the list of organizations that can use this system will be expanded. Telecom operators, as well as Russian law enforcement agencies, will be able to access it, along with the Ministry of Digital Development and Roskomnadzor. What justifications these bodies will have to provide for this is unknown.

The Roskomnadzor system assumes operation in 24/7 mode. According to the publication, it will collect data on "connections, subscriber numbers, including those used in forwarding." At the same time, information about the time and date of voice calls and text messages will be entered in the registry. Details about the communication networks used for this will also be in the database.

For the system to work properly, the operator networks will need to be upgraded. It will be necessary to integrate "call verification nodes" into them, which will be managed by the State Communications Center^[13].

Ministry of Digital Development proposed to suspend the implementation of the "Spring Law" and postpone scheduled inspections of telecom operators

The Ministry of Digital Development of Russia has prepared a list of priority measures to ensure the uninterrupted and sustainable functioning of the telecom industry and has already begun its phased implementation. This was announced on July 6, 2022 to TAdviser by representatives of the press service of the department.

As specified in the Ministry of Digital Development, the list was prepared, among other things, on the basis of industry proposals. In particular, we are talking about the suspension for a year of the norm of the "Spring Law" on increasing the volume of traffic storage. According to the Decree of the Government of the Russian Federation of 12.04.2018 No. 445, prepared by the Ministry of Telecom and Mass Communications of the Russian Federation in order to implement the "Spring Law" (No. 374-FZ), telecom operators are obliged to store text messages and records of user conversations in Russia on their servers, while annually increase the capacity of technical means of accumulation by 15% for 5 years. The deferral for a year (namely, until March 30, 2023) is valid in terms of an annual increase in the capacity of information accumulation by 15% and the suspension of the obligation of telecom operators in terms of storing video traffic on them.

This decision was made due to the fact that an increase in the capacity of information accumulation will require additional investments from telecom operators in the purchase, rental and maintenance of equipment.

The Ministry of Digital Development also proposed to ensure the possibility of communication operators to share the infrastructure of the communication network within the framework of inter-network technical roaming. The agency has already developed a bill, thanks to which subscribers of different telecom operators will be able to share one base station.

At the same time, it is proposed to suspend for one year (until the end of 2022) the fulfillment of the requirements for operators to cover federal roads and small settlements with LTE networks. This measure is designed to help reorient the inventory of telecom operators and reduce the financial burden.

The Ministry of Digital Development also considers it necessary to extend the investment tax deduction (TIN) to telecom operators. According to the department, in this way they can return part of the income tax. In turn, this will help operators maintain the quality of communication without attracting additional funding.

In addition, the number of prepared measures to support the telecom industry included:

• Introduction of a mechanism for phased indexation of tariffs of telecom operators taking into account the current inflation rate;
• Transfer of scheduled inspections of telecom operators from 2022 to 2023
• Introduction of a moratorium on transfers, dismantling of communication facilities and structures according to the requirements of state and municipal authorities.

According to the ministry, the list of support measures can be supplemented.

Duties on telecom licenses in Russia increase from 7.5 thousand to 1 million rubles

On June 8, 2022, it became known about the decision of the Ministry of Digital Development of the Russian Federation to increase state duties for 9 types of telecommunications licenses from 7.5 thousand to 1 million rubles. The department believes that this measure will lead to a significant reduction in unscrupulous telecom operators, as well as the formation of reliable telecom operators motivated for high-quality and conscientious work.

According to TASS with reference to the official Telegram channel of the Ministry of Digital Development, the innovation will affect only new operators who have licenses will renew them on the same terms. The license is valid for up to five years.

Increasing the state duty to 1 million rubles will not allow operators who violate the law to easily obtain new licenses. The cost of the license will become a stop factor for violators and will protect citizens from dubious services, the Ministry of Digital Development said.

According to the ministry, by June 2022 there are about 10 thousand telecom operators in Russia. You can get a license for only 7.5 thousand rubles, and unscrupulous operators use this: for example, when Roskomnadzor revealed a violation, operators do not pay a fine, but write an application to terminate the license and immediately issue a new one. This is easier than paying a fine, the Ministry of Digital Development explained.

The explanatory note to the bill states that this initiative will help in the fight against telephone fraud.

A significant number of small telecom operators, especially in the regions, earn money by providing deliberately dubious services, such as skipping replacement numbers or creating so-called virtual mini-PBXs. At the same time, there are no procedures for identifying the subscriber's identity in virtual PBXs. The detection and suppression of such activities does not give results, since new legal entities are being created that draw up new licenses for the provision of communication services, the explanatory note says.[14]by 130 times

The Russian government approved measures to support the telecom industry

On March 19, 2022, the Ministry of Digital Development of the Russian Federation announced the government's approval of measures to support the telecommunications industry, which the department proposed. As noted in the ministry, all initiatives have been approved, except for the moratorium on the transfer, dismantling of communication facilities and structures according to the requirements of state and municipal authorities, since it concerns Rospotrebnadzor and is being discussed additionally. This item will be included after development in the next package of measures to support the telecom industry.

The Ministry of Digital Development in March 2022 proposed to suspend the requirement of the "Spring Law" for a year, which prescribes to increase the capacity of information by 15% and store video traffic. The agency also advocated the introduction of a mechanism for fair indexation of tariffs of telecom operators, taking into account the rise in consumer prices, and proposed not to use the institution of collective dominance in analyzing possible violations when setting tariffs by individual operators.

The Ministry of Digital Development proposed to establish a moratorium on the implementation of additional burdens for frequency owners for mobile communications in the fourth generation (LTE) and to ensure the possibility of operators to share the infrastructure of the communication network.

In addition, it was proposed:

• to establish by December 31, 2024 the income tax rate for telecom operators in the amount of 3%;
• establish until December 31, 2024 a moratorium on deductions of telecom operators to the reserve of universal service;
• ensure the provision of preferential loans to operators at a rate of not more than 3% for the purchase of telecommunications equipment, replenishment of working capital and support of communication infrastructure;
• postpone scheduled inspections of telecom operators from 2022 to 2023.^[15]

2021

The number of telecom operators in Russia for the year decreased by 5%

By the end of 2021, there were 5.3 thousand telecom operators in Russia, which is 5% less than a year earlier, when the number of such companies was measured 5.6 thousand. RBC writes about this with reference to statistics on the federal budget.

We are talking about operators deducting 1.2% of the revenue from communication services to a special universal service fund. Funds from this reserve are used to provide a minimum package of communication services, which should be available to the maximum possible number of citizens of the Russian Federation, regardless of their place of residence.

The Ministry of Digital Development told the publication that in 2021 9.2 thousand operators provided information to this fund against 9.4 thousand in 2020. The department did not name the number of companies making deductions; The data sent to the reserve can contain zero income.

The decrease in the number of telecom operators in the Ministry of Digital Development was explained by the competitive processes taking place on the market, due to which small or non-competitive operators leave it, as well as operators whose license for the provision of services has expired.

According to the general director of TMT Consulting Konstantin Ankilov, as part of the consolidation of telecom, the market comes under the control of large players both due to their advanced development and due to their activity in the field of mergers and acquisitions. By January 2022, the market already has signs of oligopoly: 80% is accounted for by the five largest players, he said.

According to statistics from Roskomnadzor, in 2021 the number of registered licenses (the operator may have several legal entities, each of which may have several licenses) decreased by 9.4% compared to 2020 - to 9500.

An informed source told the publication that in 2021, contributions in the total amount of 15.11 billion rubles were transferred to the universal service reserve, which is 0.8% less than a year ago.^[16]

Russian telecom has grown by a record - by 3.2% - in recent years

The volume of the Russian telecommunications services market in 2021 amounted to more than 1.8 trillion rubles, an increase of 3.2% compared to 2020. This growth turned out to be one of the strongest in recent years, analysts at TMT Consulting say.

According to them, the tangible rise of Russian telecom is primarily associated with the recovery of the mobile market. At the same time, in the segments of fixed broadband Internet access and pay-TV, positive dynamics slowed down significantly. The subscriber bases of operators in 2021 began to grow more slowly after active connections during the period of self-isolation in 2020, and the increase in the cost of tariffs was local in nature, the study says.

At the end of 2021, the number of subscribers (active SIM-cards) of mobile communications in Russia increased by 3.3% to 259 million, approaching the level of 2019 (260 million). Penetration was 178%. In absolute terms, the subscriber base has grown by 8 million - this is the highest figure in the last 5 years. This growth was facilitated by the easing of the self-isolation regime, which ensured an influx of visitors to communication salons, as well as a partial restoration of the number of labor migrants, who traditionally form a noticeable share of customers of Russian operators. Mobile revenues rose 4.4% in 2021 against 0.9% the previous year. In addition to the growth of the subscriber base, this was facilitated by an increase in roaming revenues due to an increase in outbound tourism. Another factor was a significant increase in revenue from additional services in the B2B segment.

According to TMT Consulting, the penetration of broadband Internet access in 2021 amounted to 61%. The subscriber base grew by 0.8%, revenues - by 3.0%. In the B2C segment, the increase in the number of subscribers was primarily due to the spread of converged products of operators, however, against the background of high market saturation, growth rates slowed down. The B2B segment had a significant impact on the growth of the broadband access market in 2021 due to the connection of the third stage of socially significant objects. An additional positive influence factor was the process of restoring the SMB sector from the negative consequences of the introduction of a self-isolation regime in 2020.

The growth of the pay TV market has almost stopped: at the end of 2021, the subscriber base increased by only 0.5% (against 1.8% in 2020) and reached 46.4 million. Penetration of the service was recorded at 82%. Almost the only point of growth was the transfer by broadband access operators of their users to package tariffs with IPTV. The outflow in the cable TV segment was somewhat slowed down by the ongoing COVID-19 pandemic and the low mobility of citizens and the increased interest in television viewing as one of the main types of leisure. In turn, an increase in the number of competing offers from non-operator video services had a negative impact on the dynamics of the subscriber base of paid TV.

The market volume grew by 1.5% and amounted to 106.1 billion rubles. The slowdown in revenue growth was influenced not only by a decrease in the inflow of new subscribers, but also by a significant slowdown in ARPU growth - in 2021, operators were very cautious, in order to avoid an increase in outflow, approached the issue of raising tariffs. Numerous stocks and grace periods, especially often offered by operators in 2020, have also led to a decline in service returns. With the aim of increasing the ARPU, large operators began to pay even more attention to the development of VoD (video-on-demand), expanding their own libraries and entering into partnerships with online cinemas.

Operators in Russia turned off SIM cards 2.5 million subscribers of corporate tariffs

From December 1 to December 24, 2021, cellular operators in Russia turned off SIM-cards of 2.5 million subscribers of corporate tariffs due to non-compliance with the requirement to register them in the Unified Identification and Authentication System (ESIA).

Such a number of blocked SIM-cards was announced at a meeting in the Ministry of Digital Development, RBC reports, citing sources in large telecom operators. It is noted that about 1% of all Russian mobile users were turned off. Operators began by blocking "silent" numbers. They also warned that users need to confirm their corporate numbers, as otherwise they may also be blocked.

The source of the publication said that so far he has blocked the most corporate SIM cards. " VimpelCom According to representatives of this operator and, MTS companies operate in accordance with Russian law and only fulfill its requirements. Every week, operators report Ministry of Digital Development on the number of blocked numbers, said one of the interlocutors of the publication.

SIM-cards are turned off according to amendments to the law " On Communications," adopted in 2020. They obliged corporate clients of mobile operators to enter information about SIM card users into the system of the Public services website until December 2021 (later it was reported that they plan to extend the registration period until March 2022). The purpose of the amendments was to fight the "gray" SIM cards.

In November 2021, information was published on the Ministry of Digital Development website that 13.3 million corporate SIM cards passed the necessary registration. At the same time, Kommersant, citing analysts, reported that after December 1, 2021, more than half of corporate subscribers could be disconnected in Russia. According to the Mobile Research Group, about 32 million corporate numbers were then operating in Russia.^[17]

The Ministry of Digital Development has developed 10 initiatives to support the telecom industry

The Ministry of Digital Development, together with the telecom industry, has developed 10 initiatives that will be included in the first package of measures to support the industry. This became known on November 23, 2021.

The main direction of support measures is to reduce the investment burden on operators.

We are planning a large meeting with all participants in a week, where we will discuss the package of measures. The industry has done a great job. There are many issues related to adjusting the current norms in order to reduce the financial burden on operators. We have 10 offers in total. Operators are in difficult conditions, traffic is growing, the number of new subscribers is not increasing sharply, "said Maksut Shadayev, Minister of Digital Development, Communications and Mass Media of the Russian Federation.

Due to the lack of funding sources, telecom operators have fewer resources for timely network modernization.

Also, the Government of Russia approved an action plan to create additional conditions for the development of the information technology industry. The road map includes 62 activities, where 20 of the total are system-wide. The remaining 42 events are aimed at stimulating the development and implementation of Russian developments in specific segments^[18].

The Ministry of Digital Development begins accounting for cross-border communication lines

In November 2021, it became known about the creation in Russia of cross-border communication lines and means of communication that are connected to them. Thanks to this project, cross-border traffic crossings will be recorded to improve information security. Read more here.

The Ministry of Digital Development decided to disconnect communication during emergencies

In mid-September 2021, it became known about the initiative of the Ministry of Digital Development of the Russian Federation to disconnect communications for ordinary users during emergencies (emergencies).

As RBC writes with reference to the draft government decree developed by the department, published on the federal portal of draft regulatory legal acts, during natural and man-made emergencies, telecom operators must provide priority in using communications to law enforcement agencies, the Ministry of Emergencies, special services and other departments, while disconnecting ordinary subscribers from the network.

The Ministry of Digital Development explains the need for innovation by the fact that the operator does not always have the technical ability to provide communication between participants in the elimination of an emergency.

Communication restrictions or priority grants are made for:

• meeting the needs of priority users in communication lines, communication channels and means of communication;
• traffic restrictions to prevent congestion in communication networks;
• provision of electromagnetic compatibility during operation of avionics involved in operation in emergency zones;
• changes in existing or opening additional routes by postal and special communication operators.

Thus, the department will be able to suspend and restrict the use of communication networks in order to ensure the interaction of the government commission for the prevention and elimination of emergencies and ensuring fire safety, as well as commissions for the prevention and elimination of emergencies and ensuring fire safety of federal executive bodies.

At the same time, the restriction of communication services should not interfere with the work and interaction of bodies that participate in the elimination of emergencies.

The provision will come into force on March 1, 2022 and will be valid for six years.^[19]

Launch of GIS for the development of communication and storage infrastructure in the Russian Federation

On May 21, 2021, the provision of the Government of the Russian Federation on the state information system "General Scheme for the Development of Communication Networks and Data Storage and Processing Infrastructure of the Russian Federation" entered into force. The document makes the Ministry of Digital Development of operator of this GIS, and also approves the procedure for its interaction with other information resources. Read more here.

2020

The volume of telecom services in Russia for the first time exceeded 1.7 trillion rubles

In 2020, the volume of the Russian telecommunication services market reached 1.708 trillion rubles against 1.68 trillion rubles a year earlier. The annual figure exceeded 1.7 trillion rubles for the first time. This was reported at the Institute for Statistical Research and Knowledge Economics (ISIEZ). In HSE their calculations, experts referred to the data, and. Rosstat FCS Russia Bank of Russia

According to the published statistics, by the end of 2020 in Russia there were 33.8 million subscribers of fixed Internet access against 32.7 million by December 31, 2019. By the end of 2020, 149.9 million Russians used mobile Internet against 145.6 million a year earlier. The number of satellite Internet subscribers decreased over the year - from 88 thousand to 65 thousand.

At the end of 2020, about 42.1% of users of fixed broadband Internet went online at speeds from 100 Mbps to 1 Gbps against 33.9% a year earlier. The share of subscribers with tariffs for 10-100 Mbps amounted to 39.8% (in 2019 - 45.5%). The range of Internet access speed of 2-10 Mbps was 12.5% of subscribers (in 2019 - 13.9%). The percentage of people with internet access to 2 Mbps for the year decreased from 6.7% to 5.5%.

FTTH/FTTB (FTTx) dominates among broadband access Internet connection technologies - in 2020 it accounted for 82.5% of subscribers against 79.6% in 2019. The share of xDSL during this time decreased from 13% to 10.8%. Cable modems by the end of 2020 remained with 1% of subscribers.

The average cost of a tariff for connecting to a fixed Internet by the end of 2020 in Russia amounted to 553 rubles, which is 1 ruble less than a year ago. On the mobile Internet market, on the contrary, the indicator has grown significantly - from 327 to 389 rubles.

Internet traffic in Russia in 2020 increased to 61,989 PB from 45,877 PB a year earlier.

The full report is here.

A decrease in the volume of the telecom market by 0.7%, to 1.73 trillion rubles - TMT Consulting

The volume of the Russian telecommunications market at the end of 2020 reached 1.73 trillion rubles, which is 0.7% less than a year earlier. This dynamic turned out to be the worst in the modern history of the industry. This is stated in the study "Russian Telecommunications Market 2020-2025," which was released by the analytical company TMT Consulting.

In the 2019 report, analysts estimated the Russian telecom market at 1.73 trillion rubles following this 12-month period. Taking into account the data for 2020, it turns out that TMT Consulting adjusted the estimate of the 2019 indicator to about 1.74 trillion rubles.

According to experts, in past crises, the telecom industry showed growth due to the fact that its main segments at that time still reached saturation levels. The decline in 2020 was associated with a decrease in growth rates in the segments of mobile communications, broadband Internet access and pay TV. A slight increase in sales of such services was not enough to compensate for the reduction in income from fixed telephony, inter-operator services, etc.

The Russian mobile market in 2020 rose by 0.3% against 2.8% growth in 2019. Analysts attributed the deterioration in dynamics to a decrease in the number of subscribers and revenues from international roaming. By the end of December, there were 257 million cellular subscribers in the Russian Federation, which is 1.3% (or 3.5 million users) less than a year ago. Penetration of such services reached 175%.

The reduction in the subscriber base was the result of the self-isolation regime, during which the visits of subscribers to communication salons, the main channel for connecting new subscribers, decreased. Another factor was the closure of borders, which led to a decrease in the number of labor migrants in the country using the services of Russian operators in Russia, the report said.

Broadband access (broadband access) to the Internet reached 61% in 2020. The subscriber base grew by 2.1% - in addition to the expansion of coverage by operators, the growth was facilitated by the connection of new subscribers who had previously used mobile data transmission during the period of self-isolation. Thanks to this, the growth was higher than in 2019 (+ 1.6%).

Revenue in the broadband access market in 2020 rose only 1.1% against 3.9% a year earlier. This was affected by the period of the second quarter, when operators, with increased demand for connections, sought to attract subscribers through discounts. Another negative factor was the government's demand not to disconnect subscribers with zero balance.

In the pay-TV market, the dynamics of connections continued to decline: the increase in the subscriber base in 2020 amounted to 1.6% compared to 2.5% a year earlier. The saturation of the market affected - the penetration of the service is 81%. The growth driver is connections to IPTV in a package with broadband Internet access, while the outflow from cable networks continues, and there is also an outflow from the largest satellite operators. Revenue for the year increased by 1.5% - significantly less than last year's 8.6%. Unlike previous years in 2020, only individual large operators raised prices for their services. In addition, in the IPTV segment, due to the discounts offered by operators, ARPU decreased.

In 2020, 2.3 million subscribers refused fixed telephone communications, the penetration of the service fell by 3 percentage points. up to 27%. Fixed telephony revenues for the year decreased by 11.6%.

According to TMT Consulting analysts, the market dynamics will be primarily determined by the operators' pricing policy. A periodic review of existing tariffs can be expected to continue. Also, as the volume of traffic consumed and the requirements for the bandwidth of networks grow, operators will rely on more expensive speed tariffs for services including wired Internet access, and tariffs with a large or unlimited amount of traffic will be promoted in the mobile segment.^[20]

Communication services market growth by 1.7%, to 1.9 trillion rubles - Ministry of Digital Development

The Russian market for communication services at the end of 2020 reached 1.9 trillion rubles, an increase of 1.7% compared to 2019. Such data leads Ministry of Digital Development of the Russian Federation.

Sales of population services in 2020 amounted to 947.9 billion rubles, which is 1.7% more than a year ago. The postal service segment registered a 3.7 percent rise, to 188.8 billion rubles, including 38.8 billion rubles of postal service income from the population (here the growth was 9.7%). Revenues from special communications fell by 9.2%, to 9.3 billion rubles.

Revenues from services for joining and passing traffic in 2020 increased by 4.6%, to 288.1 billion rubles. Sales of services to ensure the regulation of the use of the radio frequency spectrum and electronic means (RES) increased by 20.3%, amounting to 3.8 billion rubles.

Against the backdrop of the coronavirus pandemic COVID-19 Ministry of Digital Development , it stated that the telecommunications industry needs state support. Otherwise, it was expected to fall by 2.5-3% at the end of 2020, the department predicted. According to the deputy head of the ministry, Oleg Ivanov talk that operators have significantly won during the pandemic is nothing more than a legend. The international and domestic segment completely failed, roaming the sale of goods in mobile fell by 33%, retail the costs of maintaining the network sharply increased due to high loads - for some operators up to 80%.

According to the Ministry of Finance, revenue from services to ensure spectrum regulation and the use of base stations in 2020 rose by 20.3% compared to the previous year and amounted to 3.8 billion rubles.

It is noted that during 2020, the trend towards a reduction in income in the segment of long-distance, intra-zone and international telephone communications remained - they decreased by 17% and amounted to 48.8 billion rubles. Revenue from the use of cellular communications, on the contrary, increased by 1.9% and reached 423.2 billion rubles.

Revenues from local telephone communications also decreased: by 14.1% in urban areas (80.7 billion rubles) and by 7.8% in rural areas (8.4 billion rubles). Revenues from local telephone communications in urban areas from the population increased by 13.3%, to 35.8 billion. Revenue from payphone connections fell by 49.5% to 6.2 million rubles.

As of December 31, 2021, there were 33.56 million broadband Internet subscribers in Russia, 33.77 million fixed network access subscribers, and 145.87 million mobile subscribers, the Ministry of Digital Development said in a report.

According to TMT Consulting, at the end of 2020, the number of broadband Internet subscribers in the segment of individuals in Russia reached 34.6 million, penetration exceeded 61%. The market volume amounted to 147.7 billion rubles.

According to experts, despite the active development of innovative services, traditional telecommunications services remain the main source of income for Russian telecom companies. The efforts of telecom operators were largely focused, in addition to mastering IT, media and other related markets, on increasing revenues from basic services. The dynamics of the telecom market was primarily determined by pricing policy.

At the initiative of Ministry of Digital Development, the government approved a number of measures designed to support the development of the industry. Among them, the provision of an annual deferral for an annual increase of 15% in traffic storage under the Yarovaya Law, simplification of the procedure for importing electronic communications, ensuring operators' access to infrastructure in residential buildings and at municipal and state property facilities.^[21]

Russian telecom grew by 2%

The volume of the Russian telecommunications industry in 2020 reached 1.79 trillion rubles, then 2% more than a year earlier. This was reported in the analytical credit rating agency (ACRA).

By the end of 2020, there were 254 million mobile subscribers in Russia against 260 million a year ago. Broadband access (broadband access) to the Internet had 35.8 million subscribers, while at the end of 2019 there were 35.5 million.

Also, the ACRA report says that the average revenue per user (ARPU) of cellular services in 2020 amounted to 331 rubles, increasing compared to the previous year, when the figure was 322 rubles. In the broadband access segment, ARPU grew from 464 to 477 rubles.

As explained in the study, when analyzing the financial and operational indicators of the market, ACRA aggregated data from rated companies and other industry players publishing information about their activities in the public domain. The Agency used its own methods of calculating certain financial indicators (for example, as in the rating methodology, ACRA continues to account for operating lease payments as part of operating expenses, capitalizing them and thus obtaining an adjusted debt burden indicator).

According to experts, the telecommunications sector was among the industries least affected by the COVID-19 pandemic. The coronavirus had a negative impact on the mobile segment, but at the same time contributed to the growth of broadband access revenue. In addition, the pandemic has not led to a significant reduction in capital expenditures of key industry players and a deterioration in their credit quality, the researchers note.

Despite the decline in roaming revenues, the duration of telephone conversations increased due to the transition of consumers to a remote mode of operation. However, most of the increase in voice traffic was within the boundaries of the tariff plans used, so there was no tangible increase in operators' income.

As for the broadband access Internet market, the pandemic has had a positive impact on its development due to the large-scale transition to a remote format of work and study, as well as due to the increased demand for games and other online entertainment. ACRA estimates revenue growth in the Russian broadband access market at 5-6% at the end of 2020.

According to estimates, the ratio of capital expenditures of industry companies to total revenue amounted to 22% (363 billion rubles). Despite the pandemic, telecom operators did not significantly reduce capital expenditures compared to the same periods of the previous year. Thus, the ratio of the total capital expenditures of the sector to revenue in the second and third quarters of 2020 amounted to 21% against 19 and 18%, respectively, a year earlier.

The main driver of capital expenditures of analysts operators is called the deployment of fifth generation networks 5G (). At the same time, the prospects for the development of 5G in Russia by the beginning of 2021 remain uncertain due to the lack of a decision on the allocation of frequencies and an understanding of at what frequencies 5G will be deployed, as well as in connection with proposals for the use of exclusively Russian equipment. These factors largely determine the amount of investment required and the timing of the implementation of the new technology. When implementing the deployment of 5G networks at frequencies of 4.8-4.99 GHz, the amount of capital expenditures will be higher due to the higher required density and greater electricity consumption, as well as against the background of the rise in equipment prices, the study says.

It also notes that the profitability of telecom will largely be determined by whether telecommunications companies will be able to shift operating and capital costs to end consumers.^[22]

2019

Market growth by 2.1% to 1.73 trillion rubles - TMT Consulting

In 2019, the volume of the Russian telecommunications services market rose by 2.1% (to 1.73 trillion rubles), which exceeds the growth rates of the previous two years - 3.3% and 2.7%, respectively. Such data were presented in the analytical company TMT Consulting.

According to experts, the cost of mobile communications in Russia at the end of 2019 increased by 3.3% against 4.9% in 2018. The base of such subscribers increased by 1.7%, to 260 million.

The study notes that the mobile segment is growing more slowly due to intense competition, the launch of unlimited tariffs and a decrease in dynamics in the corporate sector. However, despite these negative factors, the average monthly revenue per cellular subscriber (indicator) ARPU in 2019 increased by 2.6%, 321. ruble

Most federal operators in 2019 managed to maintain positive revenue dynamics due to the continuation of the tariff policy more for more - - a proposal for more money of more voice and data traffic, - stated in the report.

In 2019, the penetration of broadband Internet access in Russia reached 60%. The subscriber base grew by 1.4% largely due to connections in new buildings.

According to analysts, the opportunities for growth due to the connection of the old housing stock are exhausted - as a result, the increase was lower than a year earlier, when it amounted to 1.8%. Revenue in the Russian wired Internet services market increased by 3.1%, which is higher than last year's 2.8%. The acceleration is due to an increase in tariffs at the beginning of the year, as well as the migration of subscribers to faster, and, accordingly, expensive tariff plans.

In 2019, 2.2 million Russians refused fixed telephone communications, as a result of which the penetration of the service fell by 3 percentage points, to 30%. Fixed telephony revenues for the year decreased by 8.9%.^[23]

FSB will give the right to disconnect communication with entire countries caught in telephone terrorism

On October 25, 2019, it became known that the FSB would give the right to disconnect communication with entire countries caught in telephone terrorism. The corresponding bill was developed on behalf of the Security Council of Russia. Read more here.

2017

Revenues from Internet access for the first time bypassed cellular communications. Industry share in GDP - 1.2%

The development of the infrastructure of the digital environment, including high-speed telecommunications networks of recent generations, remains a key factor in digital development, ensuring the smooth "movement" of unlimited data, the introduction of end-to-end digital platforms and technologies. In 2017, revenue from telecommunications activities amounted to 1.2% of GDP. The share of the industry in the Russian economy (1.4% of the GVA of the business sector) is close to the average for OECD countries (1.5%). In Japan, Great Britain, Canada, Mexico, Spain, the United States, this figure reaches 1.7-1.8%.

The evolution of the telecommunications market and the transformation of consumer demand led to changes in the structure and dynamics of industry revenues. Mobile telecommunications (cellular communication), which in 2016 gave the maximum share in income (36%), in 2017 moved to the second position (27%), giving way to the leadership of documentary telecommunication (internet access) - 33% versus 27% in 2016. In 2017, for the first time, there was no increase in the number of mobile radiotelephone subscribers - 99.2% compared to 2016. Revenues from mobile telecommunication services decreased by 10.7%.

Revenue in the documentary telecommunications segment increased by 24.7%. The number of Russian subscribers to fixed and mobile broadband Internet access (broadband access) in 2017 increased by 13 and 12%, respectively, the volume of traffic - by 23 and 84%.

The number of users of mobile broadband access almost four times more than fixed, but in terms of traffic volume, fixed Internet is certainly the leader.

The number of mobile broadband access subscribers per 100 people in our country is comparable to the average for Europe, the lag behind the "developed" countries is 16%. The density of fixed broadband access in Russia is one third lower than in "developed" countries.

Every fourth fixed broadband access subscriber in Russia uses a network with a maximum connection speed of less than 10 Mbps, about 60% - from 10 to 100 Mbps, 16% - above 100 Mbps. In terms of the number of Internet users with a connection speed above 100 Mbps per 100 people of the population (3.4 subscribers), Russia is on a par with the UK (3.4), ahead of the Czech Republic (3.3), Germany (2.7), Austria (1). The Republic of Korea (30.7 subscribers), Japan (20.6), Switzerland (18.5), Sweden (17.1) are leading in this indicator.

Market volume growth by 1.3% to RUB 1.62 trillion

In 2017, according to preliminary data from the TMT Consulting analytical agency, the volume of the Russian telecommunications market amounted to 1.62 trillion rubles, which is 1.3% more than a year ago. In 2016, there was a 0.6 percent rise.

According to experts, the increase in growth rates in the Russian telecom is due to two main factors. One of them is the cessation of the two-year decline in the mobile segment, which added 1.5% in 2017. The second catalyst is to accelerate the growth of the Internet access segment - from 3.2% in 2016 to 3.8% in 2017.

Sales of services in the pay-TV market in 2017 did not increase as much in Russia as a year earlier: 10.5% versus 13.2%. In addition, the decline in operators' income from fixed telephony (9% versus 7.9%) and inter-operator services (7% versus 1%) accelerated. However, the listed segments account for only 17% of the volume of the telecommunications market, so the final indicator turned out to be positive, RBC notes.

In 2017, the number of mobile subscribers increased by 1.7% compared to 2016 and reached 260 million customers. The subscriber base of broadband Internet access increased by 3.7%, to 34 million customers, paid television - by 3.4%, to 42.6 million. The number of fixed telephony subscribers in the Russian Federation decreased by 10.5%, to 28.4 million.

According to forecasts of TMT Consulting analysts, in 2018-2022, Russian telecom will grow by more than 1%. At the same time, the company warns that such dynamics will be only if cellular operators do not allow a new round of price competition, a digital economy program will be implemented in terms of the development of telecommunications infrastructure, and a new market based on the Internet of Things will be created when commercial 5G networks and other technologies appear in Russia in 2021-2022.^[24]

2016

TMT Consulting

The volume of the telecommunications market in 2016 amounted to 1,597 billion rubles. The growth rate of income was 0.6%, which is lower than in 2015, when this figure was 0.8%.

The slowdown in growth is associated with a decrease in the dynamics of such significant market segments as Internet access and pay TV. In addition, the inter-operator segment returned to negative dynamics after growth in 2015, caused by a change in the foreign exchange rate when settling for a number of services in international areas.

Revenue from mobile services, which form more than half of the industry's revenues (55% of the market), has shown negative dynamics for the second year in a row. The agency notes some signs of an improvement in the situation: if in 2015 revenues decreased by 0.7%, then in 2016 - by 0.3%. At the same time, the subscriber base continued to grow - according to preliminary data, the number of users increased by 2.9% to 259 million. At the same time, all large operators demonstrate a decrease in ARPU.

Operators compensated for the decline in revenues by the growth of device sales. Therefore, in general, total revenues in the mobile market increased by 1.6% over the year compared to 0.5% in 2015.

In the segment of broadband Internet access with a penetration of 56% at the end of 2016, the market is saturated not only in large, but also in most medium-sized cities. Over the year, the number of private users increased by only 4%, income increased by almost the same amount. The ARPU, which remained stable for several years in 2016, showed a decline due to the fact that operators are moving from bundling fixed-line services (Internet + TV and Internet + TV + telephony) to convergence of fixed and mobile services. Service packages allow the subscriber to actually pay less for each of the components, and the operator to receive an increase in profitability from one user and an increase in loyalty.

In general, in 2016, operators switched from tactics of attracting new subscribers at the expense of short-term shares to work to retain a subscriber. At the same time, more favorable than competitors, financial conditions are offered by individual operators on an ongoing basis, which strengthens price competition in the market.

The growth of pay-TV subscribers slowed down in 2016: over the year, the subscriber base grew by more than 3% to 41 million, the penetration of the service reached 72%. At the same time, the increase in tariffs that took place during 2015 continued to affect revenue growth - the money volume of the market grew by almost 11% over the year and exceeded 74 billion rubles. Due to the rise in prices for the service, the average account per subscriber (ARPU) increased over the year on average in the market by 6.3% from 145 rubles. up to 154 rubles.

As in previous periods, in 2016, income continued to fall in all sub-segments of fixed telephone communications, which is associated with the migration of voice traffic to mobile networks and OTT services. Over the year, almost 1.7 million subscribers refused telephone services. Nevertheless, this service will continue to exist in the foreseeable future: according to TMT Consulting forecasts, its penetration will decrease from the current 42% to 33% in 2021.

Over the next 5 years, the agency predicts stable, albeit low, growth in the Russian telecommunications market. The average annual dynamics in 2016-2021 (CAGR) will be 0.4%. On the one hand, the growth of fixed-line services will continue to decline. On the other hand, we can expect that in the medium term, mobile operators will be able to return service revenue to positive dynamics. Still, with competition between the four big players, revenue growth opportunities are severely limited.

With this in mind, operators are evolving from communication service providers to providers of comprehensive ICT services, including system integration, data center services and cloud and other services. In the context of low market dynamics, a new round of acquisitions can be expected, including large telecommunications companies, as well as the development of the process of mergers with OTT and IT service providers.

Opening Broker: There are no growth points in the Russian telecom sector

2016 was a year of severe testing for the Russian telecommunications sector. Despite the obvious need of the population for mobile services, which has become an integral part of modern life, the company's shares in the stock market were under pressure. Thus, the MICEXTLC industry index grew by only 5.6% over the year, with a total growth MICEX of 26%. Under the influence of the economic crisis, at the beginning of the year, companies were forced to revise their forecasts and plans for 2016 in the direction of deterioration. The consumer downturn has tightened competition. In addition, the so-called anti-terrorist "" adopted in the summer negatively affected the sector. Yarovaya package He provoked a violent reaction from the public. And experts calculated that its implementation will require at least 10 trillion, rubles a significant part of the costs will fall on telecom operators who are obliged to store the data of their subscribers for a long time. The law will come into force on July 1, 2018. Nevertheless, telecoms in 2017 look positively: forecasts - both macroeconomic and companies - are improving.

The impact of the Yarovaya package on the telecommunications market is very difficult to assess, says Alexey Pavlov, chief specialist of the market analysis department of Otkritie Broker JSC: "The fact is that no one knows this (how the law will affect the industry - approx.). Even those who came up with the famous law. For the'Yarovaya package' is a concept. And how all this will be applied in practice, officials have not yet decided ^[25]..

Investment ideas in the sector are associated only with dividends, says Mr. Pavlov: "Stocks offer the best dividend yield here today." MTS Probably, "(AP) can be Rostelecom added (to the portfolio - approx.), But there may be an unpleasant surprise with the next payments."

The telecommunications sector is much clearer than, for example, the electricity sector, says Mr Pavlov: "It is a stable business and dividend. Accordingly, there are exactly one and a half ideas here, and, frankly, they are not the most attractive among the available ones. Therefore, of course, you should not dwell on them. "

The telecommunications industry itself is stagnating, Mr. Pavlov recalls: "Cellular communications, the Internet, cable television - no one will be surprised by this. And, alas, there are no new growth points. The only thing that shareholders' telecoms can please is dividends. And here Rostelecom has problems, since FCF is negative for 9 months, namely, it is the basis for payments. However, if desired, the funds will be found, but they are unlikely to pay much more than this year. I.e. the yield on the "usual" will be at best in the region of 7%, and in today's market you will not surprise anyone with such a figure. "

According to Mr. Pavlov, there are no more growth stories in the Russian telecommunications industry: "So MTS shares are only about dividends." The expert also assesses the prospects of another operator from the Big Three, Megafon, without optimism: "They will cut CAPEX, increase FCF and dividends - you see, and get to 800 rubles. A year in two. If you're lucky. "

2015: Largest Telecom Operators

2014: Russian communications market to collapse by 10.3% in foreign currency

According to the PMR forecast, in 2014 the volume of the Russian market for communication services provided to end users will amount to 27.6 billion euros against 30.8 billion euros a year earlier. In 2015, an indicator of 27.1 billion euros is expected.

File:Screenshot 2014-11-19 in 16.35.18.png

Russian telecom is predicted to decline in currency terms

Analysts say fixed and voice mobile services segments have reached their maturity, and the main growth driver for the local telecommunications industry is cellular data services. In 2012 and 2013, the expenses of domestic subscribers on fixed telephone communication steadily decreased.

It is noted that telecommunications services remain one of the few service areas in the country where prices do not rise despite the rate of inflation. Researchers predict that in 2014 the Russian communications market will increase by 3.5% in rubles, but in terms of euros it will collapse by 10.3% due to a sharp weakening of the ruble. In 2015, a 1.8 percent decline in European currency is expected, but in ruble terms the market will remain in positive territory, an increase of 2.3%.

The research report also said that the Russian telecom differs from the European one primarily by a strong policy of protectionism, limiting the infusion of foreign investment. In addition, there are regional differences in the development of communication services in the country, but local operators, with the support of the authorities, are trying to close this gap.

By the end of 2013, third-generation networks were deployed in all major Russian cities, where three-quarters of the total population lives. Also, in five years, the quality of 3G communication has noticeably improved, Polish experts emphasized.

They also add that the current macroeconomic and political situation in Russia directly affects the local telecommunications market. According to analysts, the growth of the Russian economy in 2014 will be close to zero.

2012: Growth

The PMR predicts (October 2012) that the market will continue to grow in the next three years, which will stimulate Internet access services, IPTV, as well as the sale of content and additional services of operators. Polish analysts expect that the volume of the telecom services market in 2013 in Russia will exceed 32.5 billion euros.

2011

Market growth of 3.3% to 29 billion euros

According to the Polish analytical company PMR (October 2012), in 2011 the Russian telecom services market grew by only 3.3%, reaching 29 billion euros. This is the lowest growth rate since 2004: in previous years, it showed an increase of 12.1% to 32.9% per year, with the exception of the crisis year 2009, when the market sank by 14%. At the same time, the market volume indicator itself significantly exceeded the PMR forecasts that analysts gave in 2009 (see below).

Analysts state that the Russian telecom services market has reached maturity, and mobile and fixed voice services, which stimulated the growth of operators' sales in the past, are now entering a phase of stagnation.

The only segments that showed growth in 2011 were fixed and mobile Internet access and pay-TV services. However, even the growth in their sales and the volume of these segments were not so significant as to affect the dynamics of the entire market, they say in PMR.

Mobile voice services account for most of the costs of telecom services in Russia: from 2001 to 2011, their share increased from 34% to 58%. At the same time, the penetration rate of mobile telephony in the country has already reached its natural limit, and various sociological surveys show that approximately 90% of adult Russians used a mobile phone in 2011, and the total number of registered SIM-cards exceeded 159% of the population.

The volume and dynamics of growth of the Russian telecom market in 2004-2013.

The market for wireless Internet access services showed significant growth in 2011 and the first half of 2012, they say in PMR, linking this mainly to the geographical expansion of 3G-UMTS networks. 3G operators introduced unlimited Internet packages in the 2nd quarter of 2011, reduced prices for this type of access to the Network and improved the quality and speed of access. The result of this was an increase in revenue of wireless Internet providers by an average of 40%, and in the 1st half of 2012 the market volume of these services grew by 45% year-on-year, the PMR states.

In the 1st half of 2012, mobile operators mainly offered a minimum volume of mobile Internet traffic of 3 GB, if exceeded, the maximum speed of access to the Network decreases.

PMR analysts also note a change in the technological structure of this market segment: the place of WiMAX and CDMA as a base for providing wireless Internet access services is gradually occupied by 3G and LTE^[26].

Receivables in telecom - 13 billion rubles

The volume of problem debt in the telecommunications sector in 2011 is estimated at 13 billion. rubles The growth of debt in the telecommunications sector Russia in 2011 amounted to 10% of 2010. The growth rate of this indicator in 2011 decreased by 14 percentage points (debt growth in 2010 was 24%).

In general, the volume of problem debts in the structure of receivables is relatively small - about 5%. However, it is worth highlighting the mobile segment separately, where this indicator is 15-17%. The decrease in the average indicator to 5% is due to a more favorable situation in the stationary communication segment, where operators have an effective lever associated with disconnecting the service.

The geographical distribution of problem debt in the context of federal districts was as follows:

• Central Federal District - 5.7 billion rubles
• Volga Federal District - 1.8 billion rubles
• Northwestern Federal District - 1.5 billion rubles
• Ural Federal District - 1.1 billion rubles
• Siberian Federal District - 1.2 billion rubles
• Southern Federal District - 943 million rubles
• Far Eastern Federal District - 616 million rubles
• North Caucasus Federal District - 262 million rubles

According to Morgan & Stout CEO Anton Dianov, the share of overdue debts transferred for professional pre-trial settlement in 2011 amounted to 32%, or 4.2 billion rubles. The planned increase in the share of claims transferred to debt agencies in 2012 is estimated at 10-12 percentage points to 44%.

2010

The income of operators, according to preliminary estimates of the Ministry of Economic Development for 2010, amounted to 1381.6 billion rubles, an increase of 2.3%. The estimate of the Ministry of Telecom and Mass Communications is an increase of 5.3% over the year. More than half of this amount (55.7%), according to the Ministry of Economic Development, fell on the private sector. At the same time, communication has become more expensive (even taking into account inflation) by 2.2%.

The number of Internet users per 100 people of the population, according to the preliminary estimate of the Ministry of Economic Development in 2010, amounted to 46.8, - 11.2% more than a year earlier.

In the first half of 2010, the main telecom companies announced the resumption of investment programs, and PMR expects that by the end of 2010 investments in the industry will be made 30% more than a year earlier. However, in terms of volume they will still be less than in 2008.

Interestingly, PMR does not see any danger to the development of VoIP services from operators that occupy a significant market share. Starting in the summer of 2009, they demanded that the state apply regulatory measures to VoIP, due to the spread of which the operators suffer from margins.

The last tough statement on this topic was made at the end of October 2010, when the head of the department for the development of products and services MTS Pavel Roitberg called the work of VoIP services "parasitization on other people's networks."

Dmitry Rutenberg, head of the transport and communications control department of the Federal Antimonopoly Service, exactly like PMR analysts, believes that VoIP services in general and Skype in particular pose a much greater threat to long-distance operators than to cellular workers. He recalls that at the expert council of the FAS, representatives of "distant" operators voiced the numbers "hundreds of millions and even billions of rubles of losses" from VoIP services.

Despite the objections of cellular and wired operators, in the coming years the interest of Russian users in Skype and similar VoIP services will grow. This will lead to a decrease in tariffs for the city, as well as a erosion of the income of long-distance operators. It can hardly be expected that the fixed telephone market in Russia will return to the pre-crisis level. This forecast was made by the British analytical agency PMR (November 2010).

2009

PMR analysts estimate the entire telecommunication market Russia in 2009 at 22.7 billion euros, which is 11% less than a year earlier. In ruble terms, although it showed an increase of 4.2%, its pace was the lowest in 10 years (since 2000). Estimates were later revised upwards (see chart in section 2012).

According to PMR, fixed telephony has become the most affected segment in the domestic telecom market. After growing by 6.4% (euro equivalent) in 2008, in the crisis of 2009, it experienced a 1.9% drop. During the same time, the revenue of Internet providers in euros increased by a third.

Prospects for Russian telecom in the view of PMR analysts, billion euros

The crisis hit telecom investment. Most operators have suspended expansion plans in the regions, and even 3G networks have developed significantly slower than expected.

Notes