J’son & Partners Consulting - Public Wi-Fi Network Market in Russia

Despite the active development of public Wi-Fi spots, the question of its monetization and provision of high quality services are still crucial tasks for operators. J’son & Partners Consulting presents main results of the research: Public Wi-Fi Network Market in Russia.

Main Projects in Russia

Russian public Wi-Fi network market is actively developing due to regional implementations and large projects, major share of which is based in Moscow.

Moscow

Largest projects have been implemented in Moscow, in particular, the construction of Vimpelcom network – 14.4 thousand access spots.

Key perspectives of Wi-Fi network operators are bind with projects implementation in government sector and city infrastructure. Department of IT (Moscow Government) – DIT, plays key role in Moscow’s Wi-Fi market development. DIT is managing Wi-Fi deployment projects in social sphere – in schools, universities, parks, pedestrian streets etc. (around 6.5 thousand access spots). Moscow Government is negotiating with operators for the implementation of CityWi-Fi project which focuses on coverage of Moscow with Wi-Fi networks as an alternative to cellular communications. In Moscow the highest demand on Wi-Fi is expected in 2018 during the World Football Championship.

Large projects are being implemented in public transport sector, in particular, in Moscow metro. Maxima Telecom is planning to install over 5 thousand Wi-Fi spots till the end of 2014, free access will be provided on all lines.

Federal Unitary Enterprise Russian Broadcasting and Alert Networks (RSVO) is expecting that the network will be launched in Moscow in the beginning of 2016. By this time, 3840 access spots will be deployed in the city center, later this indicator will hit 8 thousand all around Moscow.

Public Wi-Fi network – is open for paid or free access, not for individual use by private subscribers inside HHs or employees within the organization.

Managed (Operators) Wi-Fi networks – network of operators’ class, as a rule includes large number of access spots managed from one center, with an opportunity of software update, following the changes in parameters, access rules etc.

J’son & Partners Consulting’s forecast for 2015-2018: Public Wi-Fi networks market will grow with CAGR -5% and by 2018 market volume will be more than 290 thousand access spots. At the same time, the segment of managed access spots will grow twice faster than unmanaged spots (CAGR=7.1% and 3.2%, accordingly), also because of “nibbling” by operators of unmanaged hot spots. As a result, share of managed access spots will increase from 40.0% in 2013 till 47.4% in 2018. In 2015-2018 the market of managed spots will grow faster in B2G segment (CAGR=19.3%), while in B2B segment the growth will be unremarkable (CAGR=5.0%), and even negative in B2C segment (CAGR=-3.8%).

Revenue will grow faster in the managed Wi-Fi networks segment starting 2015, mainly because of implementation of large-scale projects in B2G segment (Moscow) and also, because of use of advertising model. In Russia Wi-Fi services market will increase from 1.17 bln RUB in 2013 till 1.75 bln RUB in 2018.