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J’son & Partners Consulting company presents the results of the research of broadband access networks market in Russia and overseas.

 

The main objective of the research made by J'son & Partners Consulting is an analysis of the current state of the market of broadband access (BBA), identification of the main trends and prospects in the private and corporate segments of users, monitor used network access technologies. A comparison of the strengths and weaknesses of the most promising technologies (GPON, FTTB, ADSL2 +), both from the point of view of users and operators are presented in the full report.

 

A brief overview of the broadband market in Russia and in the world of 2010-2015

The development of informational and communicational technology (ICT) is one of the strategic directions of modernization of economy (as well as investments) in the development of telecommunications infrastructure that helps to strengthening the strategic position of any country in the long term. In a scenario of technological development Russia repeats global international trends: rapidly expanding high-speed communications technology and access to the Internet; demand and supply of modern digital services is increasing together with a demand for high-quality range of information, education and entertainment content.

 

International studies show that there is a close connection between ICT development and economic prosperity. Large-scale deployment of high-speed communication technologies and Internet access is a catalyst for the development of ICT projects, creates multiple multiplier effect on other sectors of the national economy, helping to accelerate and scale of technological progress and, at the end, driving the growth of GDP as individual regions and the country as a whole. In addition, the development of advanced telecommunications infrastructure is an important factor in the investment attractiveness of the country.

 

According to Nikolai Nikiforov, Head of the Ministry of Communications the development of the IT industry will be one of the main state priorities. For the first time have special department managed by a separate deputy minister have been created in the Ministry. Currently, according to the Minister, the ICT sector is approximately 3.9% of Russia's GDP. In comparison with other countries, this share is relatively small. Therefore, Russia in this respect has a great potential for further growth.

 

The volume of the russian Internet BBA market

According to J'son & Partners Consulting, in 2012 the total amount of broadband access subscribers was 27,45 mln. in Russia and the total market volume reached 126 bln. RUB accordingly.

J'son & Partners Consulting estimates that the number of wired broadband access subscribers will reach 37,5 mln. and 1,57 mln. in the private and corporate segments accordingly by 2016. As a result, it is expected that in 4 years the penetration rate of services will increase from 48% to 68% in the private sector and from 66% to 74% in corporate one.

 

 

In 2012 the market of broadband access to Internet has reached 125,3 bln. RUB, including 86,6 bln. RUB (69%) in private sector.

 

At 2016 the market volume will increase for more than 40%, this growth will be mostly due to the private sector. This segment growth will be 44% in comparison to 2012 and 32% of corporate segment.

 

Main factors that secure the positive development are:

 

      • Increase in penetration rate of PCs in the house segment (due to the price reduction on devices);

      • Development of networks of data transfer and geographical expansion;

      • Decrease in the tariff plans’ prices

 

The competitive situation

TOP 5 of the largest Russian BBA market players include: Rostelecom, ER-Telecom, Vimpelcom, MTS and TTK. In 2Q 2013Rostelecom was the leader in the number of households connections with subscriber base of more than 8,94 mln. households all around Russia.

 

 

Market structure by access technologies

Optical technologies of data transfer FTTx (FTTB+GPON) are the most popular way of broadband access in private and corporate sectors.

 


According to J'son & Partners Consulting, in 2016 the optical data transfer technologies (FTTB and GPON) will be the most popular in the private and corporate sectors – the total share can reach 84% in the private sector and up to 73% in the corporate.

 

J'son & Partners Consulting specifies three the most promising technologies for operators in order to develop its access networks:

 

       GPON – construction and development of fiber networks to the apartments of the potential users;
       FTTB – construction and development of fiber networks to buildings and modernization of the existing infrastructure in the buildings;
       ADSL2+ – modernization of the existing network infrastructure.

 

GPON technology has the most potential for development nowadays in comparison with FTTB and ADSL2+. Nevertheless (opposite to FTTB) the number of companies that provide the access to the Internet via GPON is not very high. This is due the complexity of the PON technology, higher price for network construction and connection of new subscribers, lack of backup in the easiest tree topology.

 

In Russia GPON is still on the early stage. Local providers are trying to learn new technology, but only Rostelecom and MGTS have the most serious plans for it. They refused to use the old copper cable and doing the construction using passive optical network technology.

 

The number of GPON users at 2Q 2013 was around 1,05 mln. in Russia. Rostelecom has the largest market share, MGTS share does not exceed 20%.

 

 

There are also few companies that provide Internet access via GPON in Russia, thus its share of subscribers is not high. For example: TTK, Winach Telecom, telecomBIS, Icotel, etc.

 

Increase in number of connections shows the perspectiveness of technology. In 2012 the rate of GPON subscribers reached 790 thousand households, that is 2,5 times more in comparison with the previous year.

According to J’son & Partners Consulting, the number of connections via GPON technology reached 790 thousand housholds in 2012, and in the period 2012 – 2016 almost 5th times growth of connections is expected.

Analysis of the BBA network market by type of cities

One part of the research was to identify the subscribers’ base by types of cities, and to analyze the competitive situation in each city.

 

 

The largest share of private broadband access subscribers are in the cities with the population over 1 mln.people. Nevertheless the potential of the small Russian cities remain high; nowadays they have 28% of subscribers’ base.

 

Volume of the world market of wired broadband access.

Over the last three years, the world growth of wired broadband access was about 60-70 million households per year. In this view, a gradual transition of users to the GPON FTTB technology is being seen with a decrease of share of DOCSIS and xDSL technologies.

 

Total number of connected households was over 660 mln at the end of 1Q 2013, at the same time the share of xDSL technology is constantly decreasing during 3 years, mainly due to the fast development of the more perspective technologies.

At the end of 2012 Russia is the fifth largest market for wired broadband access by subscribers. At the same time Russia is running up to the leading countries, and each year moves up for one ranking place (in 2010 - 7th place in 2012 - 5th place).

 

 

Detailed results of the research are presented in the full version of the report: “Prospects for the broadband networks in Russia. Comparison with a foreign market” (75 p)

 

Content

1. Resume
2. Introduction. Description of the research and its methodology
3. Wired broadband market in Russia, 2010-2012
       3.1. The number of subscribers in the private and corporate segments
       3.2. Penetration of BBA in the private and corporate segments
       3.3. Market volume in the private and corporate segments, $
       3.4. ARPU in the private and corporate segments
       3.5. Market structure by access technologies in the private and corporate segments
       3.6. The dynamics of traffic consumption by one household
       3.7. Dynamics of average speed access to the Internet, according to the tariff plan
4. The competitive situation on the market of BBA network operators in Russia in the
    private sector
       4.1. Description of Top 10 leading providers in Russia, 2Q 2013
       4.2. Technologies and plans for it modernization used by providers
       4.3. Dynamics of subscribers bases of the leading operators
       4.4. The tariff policy of the leading providers
       4.5. A survey of the leading operators’ BBA users about the advantages and disadvantages
              of the operators
5. Traffic in broadband access networks
       5.1. The volume of traffic consumed in BBA networks by Federal District, 2010-2012
       5.2. The share of traffic consumed by xDSL channels by Federal District, 2010-2012
       5.3. Forecast of consumption of the traffic until 2016
6. Analysis of the market of broadband access networks by type of Russian cities in the
    private sector, 2012
       6.1. Megacities
              6.1.1. Description of the largest operators of BBA networks. Geography of operation
              6.1.2. Coverage of households by the leading operators of BBA networks
              6.1.3. The number of households connected to BBA networks
       6.2. Cities with a population of 500 thousand to 1 million people
              6.2.1. Description of the largest operators of BBA networks. Geography of operation
              6.2.2. Coverage of households by the leading operators of BBA networks
              6.2.3. The number of households connected to BBA networks
       6.3. Cities with a population of 100 thousand to 500 thousand people
              6.3.1. Description of the largest operators of BBA networks. Geography of operation
              6.3.2. Coverage of households by the leading operators of BBA networks
              6.3.3. The number of households connected to BBA networks
7. Wired broadband access market perspectives in Russia, 2013 – 2016
       7.1. Number of subscribers in private and corporate sectors
       7.2. Penetration of BBA access in the private and corporate sectors
       7.3. Market volume in the private and corporate segments, $
       7.4. ARPU in the private and corporate segments
       7.5. Market structure by access technologies in the private and corporate segments
       7.6. Traffic consumption by one household
       7.7. Average speed of Internet access in accordance with a tariff plan
8. Analysis of the most promising technologies for the access networks development
       8.1. SWOT-analysis of technologies
       8.2. Scenarios of development
9. Analysis of GPON technology in Russia as the most promising
       9.1. Dynamics of the number of users connected via GPON technology, 2010 - 2016
       9.2. Operators providing GPON technology
              9.2.1. Number of users
              9.2.2. Tariff policy
              9.2.3. Players plans for development of GPON networks
       9.3. GPON users’ views and impressions
10. Foreign market of wired BBA, 2010-2012
       10.1. The number of BBA subscribers in the world
       10.2. Market structure by access technologies
       10.3. The countries with the highest penetration rate of optical technologies, 2012
       10.4. The top 10 countries of wired BBA in the private sector, 2010 – 2012
       10.5. Top 10 countries by penetration rate of BBA connections per 100 residents, 2010 - 2012
       10.6. The tariff policy of foreign GPON operators
11. Conclusions
12. The volume of consumed traffic in broadband access networks by constituent Russian
      territories, 2010 – 2012
13. Annex 2. Traffic share consumption via xDSL channels by constituent Russian
      territories, 2010-2012
14. Annex 3. List of companies mentioned in the Report

 

List of Figures

Fig. 1. Number of BBA connections in B2C segment in Russia, 2010 – 2012
Fig. 2. Number of BBA connections in B2B segment in Russia, 2010 – 2012
Fig. 3. Penetration of BBA in B2C segment in Russia, 2010 – 2012
Fig. 4. Penetration of BBA in B2B segment in Russia, 2010 – 2012
Fig. 5. BBA market volume in B2C segment in Russia, 2010 – 2012
Fig. 6. BBA market volume in B2B segment in Russia, 2010 – 2012
Fig. 7. ARPU in B2C segment in Russia, 2010-2012
Fig. 8. ARPU in B2B segment in Russia, 2010-2012
Fig. 9. Market structure by access technologies in B2C segment in Russia, 2010-2012
Fig. 10. The dynamics of traffic consumption by one household, 2010-2012
Fig. 11. Dynamics of average speed access to the Internet, 2010-2012
Fig. 12. Dynamics of the average cost of 1 Mbit/s, 2010-2012
Fig. 13. Forecast of traffic consumption in BBA networks until 2016
Fig. 14. Forecast of the BBA connections in the B2C segment in Russia, 2013 – 2016
Fig. 15. Forecast of the BBA connections in the B2B segment in Russia, 2013 – 2016
Fig. 16. Forecast of the BBA connections penetration rate in the B2C segment in Russia, 2013 – 2016
Fig. 17. Forecast of the BBA connections penetration rate in the B2B segment in Russia, 2013 – 2016
Fig. 18. Forecast of the BBA market volume in the B2C segment in Russia, 2013-2016
Fig. 19. Forecast of the BBA market volume in the B2B segment in Russia, 2013-2016
Fig. 20. ARPU forecast in B2C segment in Russia, 2013-2016
Fig. 21. ARPU forecast in the B2B segment in Russia, 2013-2016
Fig. 22. Forecast of market structure by access technologies in Russia, 2013-2016
Fig. 23. Forecast of traffic consumption by one household, 2013-2016
Fig. 24. Forecast of the average speed of Internet access, 2013-2016
Fig. 25. Forecast of the average cost of 1 Mbit/s, 2013-2016
Fig. 26. Comparison of wired and wireless technologies by the development of speed of incoming traffic per subscriber
Fig. 27. The number of users connected with GPON technology in Russia, 2010 – 2016
Fig. 28. Market structure by access technologies in the world
Fig. 29. The countries with the highest penetration rate of GPON and FTTB technologies, 2012
Fig. 30. Top 10 wired broadband access markets in the private sector, 2010-2012
Fig. 31. The penetration of BBA connections per 100 residents, 2010-2012

 

List of Tables

Table 1. The geography of providing services of “home” BBA from the leading Russian providers, September 2013
Table 2. Network access technologies used by providers
Table 3. Dynamics of the number of users of the leading providers in Russia, Q2 2013
Table 4. Tariffs of the leading providers of BBA services for individuals in cities over one million people, September 2013
Table 5. Positive and negative reviews of the largest providers
Table 6. The volume of traffic consumed in BBA networks by Federal District, 2010-2012
Table 7. Traffic used via xDSL channels by Federal District, 2010-2012
Table 8. Geography of the largest operators in cities over one million people, 2012
Table 9. Coverage of households by leading providers of BBA networks in cities over one million people, 2012
Table 10. Leading providers in cities over one million people, 2012
Table 11. Geography of the largest operators in cities from 500 thousand to 1 million people, 2012
Table 12. Coverage of households by the leading providers in cities with a population of 500 thousand to 1 million people in 2012
Table 13. Leading providers in cities with a population of 500 thousand to 1 million people, 2012
Table 14. Coverage of households by the leading providers in cities with population ranging from 100 to 500 thousand people, 2012
Table 15. Leading providers in cities with population ranging from 100 to 500 thousand people, 2012
Table 16. General analysis of the most promising technologies
Table 17. SWOT-analysis of the GPON technology
Table 18. SWOT-analysis of the FTTB technology
Table 19. SWOT-analysis of the ADSL2 + technology
Table 20. Rates of JSC "MGTS" to access the Internet technology GPON (FTTH) in Moscow, September 2013
Table 21. Rates of CJSC "Winach Telecom" to access the Internet technology GPON (FTTH) in the Chechen Republic, September 2013
Table 22. The number of BBA connections in the world by technologies, mln.households
Table 23. The volume of consumed traffic in BBA networks by constituent Russian territories, 2010 – 2012
Table 24. The volume of consumed traffic by xDSL channels by constituent Russian territories, 2010 – 2012

 

 

 

This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.