The Russian telecom market is the largest in Europe, supported by a population of about 147 million. The market is dominated by the western regions where the main cities and economic centres are concentrated. All sectors have been liberalised, with competition most prevalent in Moscow. The network provider Rostelecom, having absorbed regional operators in 2011, has now merged its mobile business with Tele2 Russia, which launched mobile services in the important Moscow market in October 2015.

The government is investing billions of Rubles in a 200,000km telecom network which will provide a 10Mb/s broadband service to thousands of underserved villages. Rostelecom has been contracted to undertake and manage the work. Russia has also emerged as one of Europe’s fastest growing markets for fibre-based broadband, with Rostelecom’s own fibre broadband access network covering more than 30 million premises by December 2015, and with fibre making up more than half of its broadband subscriber base.

Russia also has the largest mobile market in Europe, with the number of subscriptions approaching 250 million. Mobile SIM card penetration is high, at around 175% by early 2016, although actual mobile user penetration is lower due to the popularity of multiple SIM card use. Several mobile network operators offer services, although the market is dominated by only four: MTS, VimpelCom, Tele2 Russia and MegaFon. Competition in the key markets of Moscow and St Petersburg is fierce, due to the size of the cities’ populations and the high concentration of wealth there.

The deployment of HSPA and LTE networks presents a new growth opportunity through mobile broadband and data services, which make up a growing proportion of overall mobile revenue.

Growth in the fixed-line broadband sector began to stall in 2013 in response to higher penetration. Nevertheless, incumbent and alternative telcos continue to upgrade infrastructure as part of a general trend for bundled services and a focus on fibre. Much of the copper network is of poor quality, while there remains considerable need to invest in infrastructure covering a large number of regional towns which still lack mobile or internet access.

For more information see – Russia - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses