Broadband in Russia

BROADBAND IN RUSSIA SETTING AMBITIOUS TARGETS Independent econometric studies estimate that broadband impact on GDP varies from 0.25 to 1.5 percent for every 10 percent increase in penetration. Broadband is a driver for foreign direct investments (FDI), as the WHY BROADBAND? 0.25-1.5% GDP software and ICT industry is the world's leading sector for global FDI projects. Broadband, a wide bandwidth data transmission line, increases a country's competitiveness, which is a must for continued and sustainable economic growth. every growth troadband penetratig Broadband becomes a necessity for public transportation, electricity, water and heating through smart technologies and real time monitoring and control. Broadband accelerates innovation by introducing new technologies, services, applications and business models. Broadband allows the diversification of the economy and the modernization of sectors like agriculture, education, healthcare and others, bringing additional long-term employment to rural areas. Broadband facilitates the adoption of more efficient business processes, cuts transaction costs, provides better access to greater labor pools, materials and consumers. to a positive net employment creation through creating direct, indirect and induced jobs. Basic mobile network infrastructure is widely spread across the country. WHERE RUSSIA STANDS? above 152% In terms of ICT development, Russia is performing reasonably well, taking into consideration a geographic context. Russia holds the second highest mobile telephony penetration of 152.84% as of end 2013, but no more than 40% of mobile telephony subscribers are signed up for mobile broadband services. above Develop an extensive 60% Mobile fiber-optic network for According to Rosstat, in 2013 56.5% of all above 56 % broadband penetration is 60.13%, which is in line with OECD broadband Russian households access in were wired with rural areas. countries. broadband, compared to over 79% of households in the European 49% Union. 1/3 Only one-third of households in rural There are significant disparities in access to information- areas have broadband access to internet (according to the classification of the ITU - 256 kbps and higher). communication technologies between urban and rural settlements. The largest gap is observed in the use of Russia excels in US CA DE JP IT KR FR RU broadband - almost twice. fiber-based broadband rollout outpacing the United States, France, and Italy in the share of fiber connections. Over The gap in broadband penetration between the leading region (Moscow) and the outsider region (Republic of Ingushetia) is more than 50 times. About 17% of Russia's households are 50% of total fixed connected through a fiber-based broadband broadband lines are fiber-based. fixed lines. 50% According to Cisco in 2018, 49% of all networked devices in Russia will be mobile-connected, more than in any other developed countries. Evolution of broadband technologies in Russia, 2008-2013 Ultra-fast broadband 2008 2009 infrastructure is 44 Mbps Russia has set one of needed to compete in the most ambitious 2010 2011 2012 the area of software XDSL Cable by 2018 broadband targets - to make 100 Mbps, or Ultra-Fast Broadband (UFB), available to 80% of Russian residents by enterprise and development of global talent. Fiber/LAN WIMAX 2013 2018. 10 Mbps Other However, according to Cisco, the average 21% of connections speed of fixed broadband connections in Russia is envisioned to reach up to 44 Mbps by 2018. Broadband access price in Russia is declining, boasting the lowest prices of broadband subscription among the OECD countries, with only less than 20% of the population in Russia still cannot 4 Mbps 73% of connection avg. 7.45 afford broadband. Mbps $9.73 for a fixed Russia's broadband (wired) broadband quality is improving, an average connection speed for internet users in Russia is 7.45 subscription, which is 1.4% of average monthly disposable salary after tax (ITU 2014). $9.73 Mbps, up from 2Mbps in 2008 Cost of broadband varies substantially Russian mobile broadband across federal services are low-priced, with $12.99 for a mobile broadband districts, with the lowest price per 1 Mbps in the largest cities, but it is 10 times higher in the Far subscription, which is 1.89% of average monthly disposable salary after tax (ITU 2014). Eastern Federal District $12.99 Three biggest mobile operators share nearly the entire mobile broadband market in Russia. Russia relies mainly on state- owned companies to implement national TELEPHONY SUBSCRIBERS MOBILE broadband targets. FIXED BROADBAND, SUBSCRIBERS BROADBAND SUBSCRIBERS TELEPHONY, SUBSCRIBERS FIXED BROADBAND &TELEPHONY FIXED MOBILE MARKET SHARES IN RUSSIA, 2013 MOBILE TELEPHONY &BROADBAND MARKET SHARES, 2013 OTHER MEGAFON BEELINE MTS ROSTELEKOM ROSTELEKOM MTS BEELINE STATE-OWNED TTK STATE-OWNED ER-TELECOM OTHER AKADO CHALLENGES GOING FORWARD While Russia has the potential to move forward with a steady growth rate, the long-term sustainability of a positive growth trajectory faces some risk. The recent growth in ultra-fast broadband has been achieved primarily through a strengthening of the market shares of the incumbent operator, Rostelecom. among operators in Russia. PREPARED BY THE WORLD BANK IN EUROPE& CENTRAL ASIA are needed. there continue? Download the report to learn more! THE WORLD BANK www.worldbank.org/ecal/russia/broadband