Moscow-based “Public Opinion Foundation” reports that 32.7 mln users in Russia have had a constant Internet access by May 2008, making the number almost 30% of the Russia’s population. This puts Russia on the 4th place in the world in Internet penetration after Germany, Brazil and UK.

The report also points out that 33% of Russian male population and 25% of females in the country are regular Internet users. 69% of the Internet users access the net from home, 40 % use the world wide web from their workplaces. Although less than 10% use their mobile phones to browse the web, the number of mobile Internet users is growing.

As forecasted by the Ministry of Telecom and Mass Communications a few months ago, Russia might as well score the second place in Europe by the end of 2008 with 46 mln. surfers.

The Russian cellular market has still shown incredible growth results as the rolling annual growth rate increased from 14 per cent for the year to 31st December 2007 to almost 16 per cent for the year to 31st March 2008, as reported by FierceMobileContent.com. Net additions of subscribers for the year were 23 million, the highest total since 2006.

In April the total size of the Russian cellular market was estimated 167.7 million, giving the country a penetration rate of 118 per cent, up from 115 per cent at the end of 2007. The bulk of Russian cellular customers are accounted for by three operators, MTS, Vimpelcom and MegaFon, who shares 83 per cent of the market.

Source: http://www.fiercemobilecontent.com

Recently the Russian IT and Communications Ministry has reported that they will do everything possible to provide 95% of schools in the country with broadband Internet access in the new school year of 2007. This penetration level is set in the Ministry's plan endorsed by the Presidential Council for the implementation of the national priority projects and demographic policies.

The program also proposes a new software purchasing scheme. All schools will receive standard software set - both basics and modern office and graphics processing applications. By improving communication environment, Ministry expects a rise in hardware (primarily PC) sales next year.

 

Russian mobile phones market is on the tremendous rise as it was reported by the Federal Customs Service in the end of January. The handset import to Russia doubled in 2006 reaching the units volume of 31.17 million and the monetary volume of US$4.51 billion (which is the triple growth compared to the previous year). Newsworthy is the fact that an average price of an imported mobile phone increased by 45%.

The growth in import volume is partially attributed to the ongoing efforts of Russian authorities to eliminate illegal imports. The natural driver to that is the growing mobile telephony penetration in the country. As AC&M Consulting reported, the number of mobile subscribers rose by 20% and reached 152 mln in 2006. That means that the penetration rate is of 104% on the national basis. Two major cities of Russia - Moscow and St. Petersburg - reached the penetration ratios of 156% and 139% respectively.

Source: Prime-Tass

J’son & Partners reported recently that the Russian mobile content market will demonstrate growth of 56% this year amounting to $530m-$560m in monetary volume.

The preferences of mobile subscribers are changing in comparison with the previous periods. There is a definite shift in content type this year, going from simple services like ringtones and such, to voice services (growth of 250%) and mobile entertainment (growth of 60%).

 

While the basic products segment of the Russian mobile market has nearly reached its primarily saturation, Telecom operators are starting to look for new service options to maintain their growth in the future.

As a clear reflection of this trend, two Russian mobile carriers made their bids for obtaining WiMAX frequencies. Recently, Russian telecoms regulating authority issued a WiMAX license to the second largest mobile operator in the country - Vimpecom. So, Vimplecom received frequencies in 34 Russian cities. Vimpelcom has also requested an extension of the primary frequencies license.

At the same time, Megafon has also made a bid for the WiMAX license.

Source: Prime-Tass

Recently reported figures on broadband Internet market in Moscow shows the volume growth of 45% in the year of 2006. The penetration is about 20% of households in 2006. Estimated trend makes us expecting 26% penetration at the end of the year, continuing to 50% in the 3 years time horizon.

Technology-wise, the Ethernet segment is leading the market, having a share of 57% of broadband customers.

Source: www.rbc.ru

The IKS-Consulting analytical and market research agency reports that the 61% growth rate, achieved by the Russian wireless broadband market in the first half of 2006, will most likely stay put in the second quarter of 2006.

The market size is estimated at USD 33M, representing approximately a 5% share of the total Russian Internet market, and about an 8% share of the domestic broadband market. It is expected that the current growth trend will continue and that the market will grow to USD 80M by the end of 2006, thus accounting for a 6% share of the Russian total Internet market size.

The wireless broadband networks are concentrated in the greater regions of Moscow and St. Petersburg. Most of the existing broadband networks (about 220) are built on RadioEthernet (IEEE 802.11), but from now on, the networks will be built on WiMAX.

The number of Internet users, directly connected to broadband networks - grew by 8K in the second quarter of 2006 to reach 35K in total.

A Russia-based research and statistics firm reported that Russia's mobile phone penetration approached 100% at the end of July this year. The number of mobile phone subscriptions in the country reached 143.07 million, which represents 98.5% national market penetration.

These figures were disclosed by ACM (Advanced Communications and Media) Consulting research company last week. The researches pointed out that the number of mobile subscriptions does not reflect the number of cell phone users, as many people hold a few active mobile SIM cards. They estimate that the penetration in Moscow reached 149% at the end of July, the penetration in the regions climbed up to 89.9% whereas the country's penetration soared up to 96.6%.

 

Russia is ranked as a “Challenging” outsourcing destination in the "2006 Global Outsourcing Guide" prepared by Stephanie Overby, meaning that it is seen as a major “challenger” to the “leaders”.

Although that this year, Russia has received a much better rating in this annual outsourcing guide prepared by the CIO Magazine then it had in the past, the bight idea of moving your IT functions to the country still seems darkened by certain drawbacks, and we dare to seriously question them.

The author agrees that the highly skilled labor pool of Russia adds a distinctly boutique touch to the IT outsourcing services the country offers, thus suggesting a special focus on complex modeling and showcasing creative problem-solving. On the negative side, the issues of piracy and poor infrastructure are quoted.

The much-talked-of piracy within the borders of the Russian Federation is the typical legacy of emerging economies, and Russia is already adequately facing it. Russian IPR protection legislation is fully compatible with international standards and law enforcement is getting to be on the right track. Joint efforts of vendors and government, along with the growing wealth all around the country show real progress, and today, even Microsoft reports significant improvement of the situation with the licensing of popular Microsoft products. Needless to say that when it comes to Russian IT outsourcing service providers - IP rights are earnestly protected, and there is not a single case of IPR violation by a Russian ESP.

In its turn, the topic of Russian infrastructure was very well covered in the “Talent, Infrastructure, Culture Attract CIOs to Russia” report, prepared by AT&T back (!) in January 2005. The cited Russia’s top networking facts include: mobile phone penetration that is higher than in major U.S. cities (70% in Moscow compared to 54% in NYC), growing VoIP (the largest market in Europe, 6th largest in the world), the widespread broadband with over 1,250,000 active xDSL lines and the year-over year growth rate of weekly Internet viewers was at 85% in 2005. With this in mind, one would not describe the fastest growing telecom market in Europe as the one with poor infrastructure.