Russia Telecoms Market Report

Telecoms, Mobile and Broadband - Statistics and Analyses

Publication Date: April 2024

Report Pages: 271

Analyst: Henry Lancaster

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Summary
Table Of Contents

Russia scrambles to develop domestically made telecom hardware

The Russian telecom market is the largest in Europe, supported by a population of about 143 million. The overall market is dominated by the western regions, particularly Moscow and St Petersburg which are the main cities and economic centres. Many other regions in the east and north of the country were settled as part of government schemes during the Soviet period, aimed at creating population centres. The artificiality of these schemes created cities and towns which are unsustainable, and since the 1990s most of these settlements have seen dramatic population declines as residents have moved further east to European Russia. They not only remain a drain on Federal resources, but telcos have also been hard pressed to justify investing in areas of low population density.

All sectors of the telecom market have been liberalised, with competition most prevalent in the two largest regional markets. The incumbent state-owned telco Rostelecom, which absorbed most of the regional players, in late 2019 acquired the remaining 55% of Tele2 Russia which it did not already own.

At least in the more populated regions, telcos continue to deploy and modernise fixed-line network infrastructure to offer improved broadband services as well as a range of IP-delivered content. As a result, the fibre broadband sector has shown considerable growth, supported by the government’s program to extend the reach of broadband to outlying regions. By contrast, the number of DSL connections continues to fall as subscribers are migrated to fibre where available.

The development of 5G services has been stymied by the lack of spectrum. Although MNOs have licences to use 700MHz spectrum for 5G, this spectrum has yet to be released by broadcasters. Spectrum in the 3.4GHz range commonly used for 5G in Europe has been restricted for use in Russia by the military and intelligence agencies. Despite these limitations, the four principal MNOs each have an equal share in a joint venture, New Digital Solutions, aimed at developing a strategy to deploy 5G using shared network and spectrum assets. Another complication for 5G is that the main vendors, including Nokia and Ericsson, exited the country soon after Russia’s invasion of Ukraine. Although Chinese vendors such as Huawei and ZTE have the potential to fill some of the gaps, the threat of secondary sanctions against them complicates their involvement in this sector.

This report provides an overview of Russia’s mobile, fixed-line telecom, and IT markets. It includes information on key regulatory developments, data on fixed-line networks, and an assessment of telcos’ financial and operating performance. The report reviews the major mobile operators as well as technologies and mobile data, content and applications, and a variety of updated financial and operational statistics.

Key developments:

MNOs contract domestic vendors for mobile network equipment and base stations.
VEON exits Russia with the sale of its subsidiary VimpelCom.
Government debunks rumours of Rostelecom’s potential acquisition of MegaFon.
MTS expands 5G trials on Moscow Metro.
Vodafone Group ends partner market agreement with MTS.
Russian-manufactured 5G equipment to be made available for trials by 2025.
MegaFon contracts vendors to develop its mobile infrastructure through to 2030.
Report update includes the regulator's market data updates, telcos' financial and operating data to Q2 2023, regulator’s market data to Q1 2023, updated Telecom Maturity Index charts and analyses, recent market developments.

Companies mentioned in this report:

MegaFon, Tele2 Russia, Skylink, VEON, Volga Telecom, SMARTS Group, Uralsvyazinform, MTS, TransTeleCom, ER-Telecom, MTS, Rostelecom, PeterStar, Synterra Telecom, Comstar, Summa Telecom, MetroMAX, Comstar, Yota, Virgin Connect, Enforta, Golden Telecom

Key statistics
Regional Europe Market Comparison

Market characteristics
Market Leaders
Market Challengers
Market Emergents
TMI versus GDP
Mobile and mobile broadband penetration
Fixed versus mobile broadband penetration

Country overview
Telecommunications market

Overview and statistics

Regulatory environment

Telecommunications Law 2003
Regulatory authority

Censorship

Fixed-line developments

Telecom sector liberalisation
Privatisation
Interconnection
Access
Carrier selection
Universal Service Obligation

Broadband market developments
Mobile network developments

Mobile Number Portability (MNP)
3G licences
800MHz spectrum
900MHz spectrum
1800MHz spectrum
2.6GHz spectrum
Roaming
SIM card registration
Infrastructure sharing

Mobile market

Market analysis
Mobile statistics
Mobile infrastructure

5G
4G (LTE)
3G
GSM

Narrowband IoT (NB-IoT)
M2M networks
Mobile voice

Voice-over-LTE (VoLTE)

Mobile data

SMS/MMS

Mobile broadband
Major mobile operators

Mobile TeleSystems (MTS)
VEON
MegaFon
Tele2 Russia/Rostelecom
SMARTS Group
Uralsvyazinform
VolgaTelecom
Skylink
Mobile Virtual Network Operators (MVNOs)

Mobile content and applications

M-commerce
M-payments

Fixed-line broadband market

Introduction and statistical overview

Broadband statistics

Hybrid Fibre Coax (HFC) networks
Digital Subscriber Line (DSL) networks

Rostelecom
MTS
VEON
Other providers

Fibre-to-the-Premises (FttP)
Other fixed broadband services

Broadband Powerline (BPL)
Fixed wireless broadband
Wi-Fi
WiMAX
Internet via satellite

Fixed network operators

Introduction
Svyazinvest

Regional operators

Rostelecom
Central Telegraph
VEON
Multiregional Transit Telecom
TransTeleCom (TTK)
PeterStar
ER-Telecom
MTS

Telecommunications infrastructure

Overview of the national telecom network

Central Telegraph
MTS
Golden Telecom
PeterStar
Rostelecom
TransTeleCom
ER-Telecom

International networks

Submarine cables
Satellite networks

Data centres

MTS
Rostelecom

Appendix – Historic data
Glossary of abbreviations
Related reports

List of Tables

Table 1 – Top Level Country Statistics and Telco Authorities - Russia – 2023 (e)
Table 2 – Increase in telecom market revenue – 2012 – 2023
Table 3 – Change in the share of telecom market revenue by type – 2016 – 2020
Table 4 – Growth in the number of mobile number portings – 2015 – 2021
Table 5 – Growth in the number of mobile subscribers and penetration – 2012 – 2027
Table 6 – Growth in the number of mobile subscribers and penetration in Moscow, St Petersburg – 2012 – 2019
Table 7 – Change in market share of subscribers by operator – 2012 – 2020
Table 8 – Change in in mobile service revenue – 2012 – 2023
Table 9 – Growth in the number of mobile base stations by technology (thousand) – 2013 – 2020
Table 10 – Mobile ground base towers in service – 2015 – 2021
Table 11 – Development of MegaFon’s LTE infrastructure – 2014 – 2020
Table 12 – Increase in the number of MegaFon’s 3G and LTE base stations – 2012 – 2021
Table 13 – Decline in the number of SMS sent – 2012 – 2024
Table 14 – Growth in the number of active mobile broadband subscribers and penetration – 2012 – 2027
Table 15 – Increase in mobile internet traffic – 2011 – 2022
Table 16 – Development of MTS’s mobile financial data (Russia, RUB billion) – 2012 – 2023
Table 17 – Development of MTS’s quarterly mobile financial data (Russia, RUB billion) – 2014 – 2023
Table 18 – Development of MTS's capex (Russia, RUB) – 2012 – 2023
Table 19 – Development of MTS’s operating profit and margin (Russia, RUB) – 2012 – 2023
Table 20 – Growth in the number of MTS Russia’s mobile subscribers – 2012 – 2023
Table 21 – Change in MTS Russia’s mobile voice and data traffic – 2014 – 2023
Table 22 – Change in the number of VEON’s mobile subscribers (Russia) – 2012 – 2022
Table 23 – Development of VEON’s ARPU and MOU (Russia) – 2012 – 2022
Table 24 – Development of VEON’s mobile financial data by type ($ million) – 2012 – 2022
Table 25 – Development of MegaFon’s consolidated financial data (RUB billion) – 2012 – 2023
Table 26 – Change in MegaFon’s capex – 2012 – 2023
Table 27 – Development of MegaFon’s mobile revenue (RUB billion) – 2012 – 2020
Table 28 – Growth in the number of MegaFon’s mobile subscribers – 2012 – 2023
Table 29 – Development of MegaFon’s mobile data traffic – 2012 – 2019
Table 30 – Growth in MegaFon’s mobile data revenue and subscriber base – 2012 – 2020
Table 31 – Increase in the number of Rostelecom’s mobile subscribers – 2017 – 2022
Table 32 – Development of Tele2/Rostelecom’s mobile revenue (RUB billion) – 2017 – 2023
Table 33 – Internet users and penetration rate – 2012 – 2020
Table 34 – Growth in the number of fixed broadband subscribers and penetration – 2012 – 2027
Table 35 – Increase in fixed internet traffic – 2011 – 2022
Table 36 – Development in the number of cable broadband subscribers – 2012 – 2024
Table 37 – Development in the number of DSL subscribers – 2012 – 2024
Table 38 – Change in the number of Rostelecom’s fixed broadband subscribers by platform (million) – 2012 – 2023
Table 39 – Growth in the number of MTS’s fixed broadband subscribers – 2012 – 2023
Table 40 – Growth in the number of VEON’s fixed broadband subscribers (million) – 2012 – 2022
Table 41 – Development of VEON’s fixed broadband revenue ($ million) – 2012 – 2022
Table 42 – Development of VEON’s fixed broadband ARPU ($/month) – 2012 – 2022
Table 43 – Growth in the number of Rostelecom’s fibre broadband subscribers – 2012 – 2023
Table 44 – Growth in the number of MGTS’s GPON subscribers – 2014 – 2023
Table 45 – Growth in the number of VEON’s FttB subscribers – 2012 – 2022
Table 46 – Development of VEON’s FttB revenue – 2012 – 2022
Table 47 – Growth in the number of fibre broadband subscribers – 2012 – 2024
Table 48 – Satellite broadband subscribers – 2012 – 2024
Table 49 – Development of Rostelecom’s financials (post-merger) (RUB billion) – 2012 – 2023
Table 50 – Change in the number of Rostelecom’s fixed subscribes by type (million) – 2012 – 2023
Table 51 – Development of VEON Group’s financial data ($ billion) – 2012 – 2022
Table 52 – Development of VEON’s domestic financial data ($ billion) – 2012 – 2022
Table 53 – Growth in ER-Telecom’s revenue – 2014 – 2021
Table 54 – Development of MTS’s financials (Russia, RUB million) – 2012 – 2023
Table 55 – Development of MTS’s fixed-line subscribers by type (million) – 2012 – 2023
Table 56 – Decline in the number of fixed lines in service and teledensity – 2012 – 2027
Table 57 – Increase in international internet bandwidth – 2012 – 2019
Table 58 – Historic - Fixed lines in service and teledensity – 1998 – 2011
Table 59 – Historic - Telecom sector revenue (RUB million) – 2003 – 2011
Table 60 – Historic - MTS financial data (Russia, $ million) – 2008 – 2012
Table 61 – Historic - Rostelecom (pre-merger) financial data (RUB million) – 2008 – 2011
Table 62 – Historic - Mobile service revenue – 2003 – 2011
Table 63 – Historic - Mobile subscribers and penetration rate – 1995 – 2011
Table 64 – Historic - Mobile VAS market share by operator – 2007 – 2015
Table 65 – Historic - MegaFon mobile revenue – 2005 – 2011
Table 66 – Historic - Development of MTS’s fixed-line subscribers by type (million) – 2008 – 2011
Table 67 – Historic - MTS mobile financial data (Russia, RUB billion) – 2004 – 2011
Table 68 – Historic - MTS mobile financial data (old style, Russia, $ billion) – 2004 – 2012
Table 69 – Historic - Tele2 financial data (SEK million) – 2007 – 2012
Table 70 – Historic - MTS Russia MOU, churn and annualised ARPU – 2001 – 2015
Table 71 – Historic - MTS Russia annualised VAS – 2004 – 2015
Table 72 – Historic - MTS Russia annualised VAS revenue by type (RUB million) – 2010 – 2015
Table 73 – Historic - M-commerce revenue – 2011 – 2015
Table 74 – Historic - Rostelecom mobile subscribers – 2010 – 2014
Table 75 – Historic - Rostelecom mobile revenue – 2008 – 2014
Table 76 – Historic - Tele2’s mobile subscribers – 2007 – 2017
Table 77 – Historic - VEON mobile subscribers (Russia) – 2005 – 2011
Table 78 – Historic - SMARTS Group subscribers – 2009 – 2015
Table 79 – Historic - SMARTS Group financial data – 2006 – 2013
Table 80 – Historic - Internet users and penetration rate – 1999 – 2011
Table 81 – Historic - Fixed broadband subscribers and penetration – 2003 – 2011
Table 82 – Historic - VEON ARPU and MOU (Russia) – 2007 – 2011
Table 83 – Historic - Increase in international internet bandwidth – 2006 – 2011
Table 84 – Historic - Development of VEON (Russia) financial data ($ billion) – 2007 – 2011
Table 85 – Historic - Development of VEON Group’ financial data ($ billion) – 2007 – 2011
Table 86 – Historic - Rostelecom’s subscriber by type (million) – 2008 – 2011
Table 87 – Historic - Development of Rostelecom’s financials (post-merger) (RUB billion) – 2008 – 2011
Table 88 – Historic - Growth in the number of VEON’s fixed broadband subscribers (thousand) – 2008 – 2011
Table 89 – Historic - Development of MegaFon’s consolidated financial data (RUB billion) – 2005 – 2011
Table 90 – Historic - Change in the number of Rostelecom’s fixed broadband subscribers by platform – 2008 – 2011
Table 91 – Historic - Growth in the number of mobile subscribers and penetration in Moscow, St Petersburg – 2006 – 2011
Table 92 – Historic - Growth in the number of MegaFon’s mobile subscribers – 2009 – 2011
Table 93 – Historic - Change in MegaFon’s capex – 2009 – 2011

List of Charts

Chart 1 – Europe Telecoms Maturity Index – Market Leaders
Chart 2 – Europe Telecoms Maturity Index – Market Challengers
Chart 3 – Europe Telecoms Maturity Index – Market Emergents
Chart 4 – Europe - Telecoms Maturity Index vs GDP per capita
Chart 5 – Europe – Mobile subscriber penetration vs mobile broadband penetration
Chart 6 – Scandinavia/Baltics fixed and mobile broadband penetration
Chart 7 – Northern Europe fixed and mobile broadband penetration
Chart 8 – Eastern Europe fixed and mobile broadband penetration
Chart 9 – Southern Europe fixed and mobile broadband penetration
Chart 10 – Increase in telecom market revenue – 2012 – 2023
Chart 11 – Change in the share of telecom market revenue by type – 2016 – 2020
Chart 12 – Growth in the number of mobile subscribers and penetration – 2012 – 2027
Chart 13 – Growth in the number of mobile subscribers and penetration in Moscow, St Petersburg – 2012 – 2019
Chart 14 – Change in market share of subscribers by operator – 2012 – 2020
Chart 15 – Change in mobile service revenue – 2012 – 2023
Chart 16 – Growth in the number of mobile base stations by technology – 2013 – 2020
Chart 17 – Increase in the number of MegaFon’s 3G and LTE base stations – 2012 – 2021
Chart 18 – Decline in the number of SMS sent – 2012 – 2024
Chart 19 – Growth in the number of mobile broadband subscribers and penetration – 2012 – 2027
Chart 20 – Increase in mobile internet traffic – 2011 – 2022
Chart 21 – Development of MTS’s mobile financial data – 2012 – 2023
Chart 22 – Development of MTS’s quarterly mobile financial data – 2014 – 2023
Chart 23 – Development of MTS's capex – 2012 – 2023
Chart 24 – Development of MTS’s operating profit and margin – 2012 – 2023
Chart 25 – Growth in the number of MTS Russia’s mobile subscribers – 2012 – 2023
Chart 26 – Change in MTS Russia’s mobile voice and data traffic – 2014 – 2023
Chart 27 – Change in the number of VEON’s mobile subscribers – 2012 – 2022
Chart 28 – Development of VEON’s mobile financial data by type – 2012 – 2022
Chart 29 – Development of MegaFon’s consolidated financial data – 2012 – 2023
Chart 30 – Change in MegaFon’s capex – 2012 – 2023
Chart 31 – Development of MegaFon’s mobile revenue – 2012 – 2020
Chart 32 – Growth in the number of MegaFon’s mobile subscribers – 2012 – 2023
Chart 33 – Growth in MegaFon’s mobile data revenue and subscriber base – 2012 – 2020
Chart 34 – Increase in the number of Rostelecom’s mobile subscribers – 2017 – 2022
Chart 35 – Development of Tele2/Rostelecom’s mobile revenue (RUB billion) – 2017 – 2023
Chart 36 – Internet users and penetration rate – 2012 – 2020
Chart 37 – Growth in the number of fixed broadband subscribers and penetration – 2012 – 2027
Chart 38 – Development in the number of cable broadband subscribers – 2012 – 2024
Chart 39 – Development in the number of DSL subscribers – 2012 – 2024
Chart 40 – Change in the number of Rostelecom’s fixed broadband subscribers by platform – 2012 – 2023
Chart 41 – Growth in the number of MTS’s fixed broadband subscribers – 2012 – 2023
Chart 42 – Growth in the number of VEON’s fixed broadband subscribers – 2012 – 2022
Chart 43 – Development of VEON’s fixed broadband revenue – 2012 – 2022
Chart 44 – Development of VEON’s fixed broadband ARPU – 2012 – 2022
Chart 45 – Growth in the number of Rostelecom’s fibre broadband subscribers – 2012 – 2023
Chart 46 – Growth in the number of MGTS GPON subscribers – 2014 – 2023
Chart 47 – Growth in the number of VEON’s FttB subscribers – 2012 – 2022
Chart 48 – Development of VEON’s FttB revenue – 2012 – 2022
Chart 49 – Growth in the number of fibre broadband subscribers – 2012 – 2024
Chart 50 – Development of Rostelecom’s financials (post-merger) – 2012 – 2023
Chart 51 – Change in the number of Rostelecom’s subscriber by type – 2012 – 2023
Chart 52 – Development of VEON Group’s financial data – 2012 – 2022
Chart 53 – Development of VEON’s domestic financial data – 2012 – 2022
Chart 54 – Growth in ER-Telecom’s revenue – 2014 – 2021
Chart 55 – Development of MTS’s financials – 2012 – 2023
Chart 56 – Development of MTS’s fixed-line subscribers by type – 2012 – 2023
Chart 57 – Decline in the number of fixed lines in service and teledensity – 2012 – 2027
Chart 58 – Increase in international internet bandwidth – 2012 – 2019

List of Exhibits

Exhibit 1 – Map of Telecom Maturity Index global ranking among countries in Europe
Exhibit 2 – Generalised Market Characteristics by Market Segment
Exhibit 3 – Europe – Market Leaders and market developments
Exhibit 4 – Europe – Market Challengers and market developments
Exhibit 5 – Europe – Market Emergents and market developments
Exhibit 6 – LTE launch dates by operator

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Russia Telecoms Market Report

Telecoms, Mobile and Broadband - Statistics and Analyses

Purchase this Report

Russia scrambles to develop domestically made telecom hardware

Key developments:

Companies mentioned in this report:

Key statistics

Regional Europe Market Comparison

Country overview

Telecommunications market

Regulatory environment

Mobile market

Fixed-line broadband market

Fixed network operators

Telecommunications infrastructure

Appendix – Historic data

Glossary of abbreviations

Related reports

Purchase this Report

Share this Report

TMT Intelligence

A platform to scale your intelligence tasks

Research Methodology

Hot Topics

News & Views