Investment in ICT infrastructure can launch chain reaction, which will cause digital transformations. The time for which the country will be able to receive economic benefits from Big Data and IoT will decrease.
With an overview of the report of the UN Broadband Commission - Boris Lastovich.
Since its inception in 2010, the UN Broadband Commission has sought to promote effective and inclusive policies and practices around the world for sustainable development through realizing the benefits of broadband and information and communication technologies (ICTs). The next report of the Commission provides an opportunity to get acquainted not only with current indicators, but also with global trends, as well as with the approaches and assessments of the development of broadband access (BBA), ICT and the Internet adopted in the international community.
Global broadband continues to show healthy growth, although there are some challenges:
- the growing digital divide between developed and developing countries, between rich and poor;
- discrepancy between real investments and financing needs for the development and modernization of networks;
- slowdown in mobile subscription growth - as developed markets approach saturation, operators have to deal with slower growth and adapt to consumer demands.
Measuring and monitoring indicators and trends in broadband and ICT has become more difficult as new (digital) technologies are increasingly integrated, invisible and ubiquitous. The boundaries between telecommunications, IT, ICT and the Internet are blurred today, so any assessment depends on which categories are used.
According to IDC, the global information and communications technology market (including hardware, software, telecommunications, and services) was $4.8 trillion in 2016, up from $3.7 trillion in 2015. The online statistics portal Statista estimates global ICT sector revenues at around 3.98 trillion euros (approximately $4.4 trillion) in 2016 and is projected to reach 4.46 trillion euros by 2019. Annual revenues from telecommunications services exceed 1 trillion euros ($1.4 trillion).
Individual broadband access to networks and services
In terms of network connectivity, the picture is different for mobile and broadband subscriptions (Table 1). According to forecasts, by the end of 2017, the global network will cover about 3.58 billion people, which is equivalent to about 48% of the world's population, against 3.4 billion people (45.9%) at the end of 2016.
It is important to distinguish between simply having access and the number of active users.
A recent study conducted in 75 countries around the world showed that, on average, 94% of the population of these countries lives within the range of a 2G mobile signal. But in practice, it is impossible to effectively use it to access the Internet. Only 76% of the world's population has access to a 3G signal, and 43% have access to 4G connections.
Almost half of the world's population now has broadband access. The digital divide persists mainly due to a lack of infrastructure, a lack of skills to use, or a lack of compelling content. Ineffective policies, outdated regulatory frameworks and a lack of incentives to invest play a role in development issues. Also important are the business models required to provide universal service, one of the incentives to deploy broadband throughout the territory, including rural and remote areas.
Table 2 shows the distribution of Internet users by region. The world's largest Internet market is China: about 700 million users. It is followed by India with 355 million.
Russia has the largest audience in Europe global internet, about 100 million. - Approx. comp.
An assessment of access diffusion would not be complete without considering the growth of online tools and applications used for communication, entertainment, education, healthcare, finance and public services, as well as without taking into account the growth in the number of other connections and devices. Some of the areas of applied application of online tools are considered in the report.
Concerning social networks Let's say WhatsApp increased its monthly active users (MAUs) from 1 billion in February 2016 to 1.2 billion in January 2017. YouTube has also surpassed 1 billion users, and Google has yet to release an update since reaching 1 billion gmail users/accounts in 2016.
According to Facebook, in June 2017, the social network had an average of 1.32 billion daily active users, and the total number of registered users at that time exceeded 2 billion (in June 2016 - 1.71 billion). At the same time, 1.15 billion active Facebook users used exclusively mobile access networks.
The report does not quantify connected machine-to-machine (M2M) communication devices and their development trends. It should be noted that these estimates in different sources differ significantly, but we believe that we can agree with the assessment of the International Telecommunication Union, according to which the number of M2M devices is approaching the number of “live” broadband users, i.e. is estimated in billions, and in terms of pace is ahead of the growth of the latter- Note. comp.
Online content and applications as main drivers of demand
The persistence of unconnected and loosely connected communities is partly a result of the rapid evolution from voice telephony to high-speed networks, as well as problems deploying sufficient communications infrastructure, especially in rural and poorer communities. Running on top of this infrastructure over the past decade, online applications have become increasingly popular with consumers and are driving broadband around the world by enabling interaction in ways that traditional communication channels cannot.
Online applications such as Facebook, Google, Instagram, KakaoTalk, LINE, Signal, Skype, Snapchat, Threema, Viber, WhatsApp, and WeChat have changed the way we build informal communities and search for information, have made valuable contributions to applied problems across sectors, and now determine a significant share of the socio-economic results of the spread of broadband access, digitalization, and the use of the Internet.
Not surprisingly, some operators have sought to thwart the growth of online applications, seeing their distribution as an unfair limitation on their revenue and investment opportunities. They demanded that "the same rules for the same services" be applied, prompting the authorities to extend the rules of traditional telecommunications to online applications. Such suggestions are erroneous because telecom operators and online application providers offer fundamentally different services. Traditionally, carriers only offered access to telecom services and some services, while online applications provide interactive experiences.
Gradually, there is an understanding that applications are driving demand for carriers' broadband services. Without compelling content, consumers are less willing to pay for access. It is also false to say that online applications do not have a general economic value for the countries where their consumers live. Recent studies have shown that a 5% increase in WhatsApp has a direct and indirect effect of $22.9 billion. According to Deloitte, in 2014, Facebook had an economic impact of $227 billion and created 4.5 million jobs worldwide. These numbers have undoubtedly increased in recent years.
On the other hand, ensuring free access of content providers to the network infrastructure and the quality of its delivery in the face of an avalanche of traffic growth is fully financed by operators who are forced to constantly develop and upgrade their networks without economic benefit. Their incentives to invest in network development are potentially diminishing.
Telecom operators and content providers have a symbiotic relationship, and they can be used to invest in the development of broadband networks. So far, everything is limited to the fact that providers of online applications and OTT content invest only in their own infrastructure: data centers, industrial networks, servers and routers, which are an important part of the physical structure of the Internet, but do not solve the problem of passing the traffic they generate.
On the complex market there is a shift in value, a redistribution of revenue from operators to content providers, the share of operators' revenues from the growing implementation of complex services is declining, which also negatively affects investments in broadband.
The UN Broadband Commission believes that regulators should not separate the interests of providers of online applications, content and telecom operators. A widely accessible and relevant digital environment is the product of a unified political and regulatory framework that should prioritize development, competition, and innovation based on the interests of consumers in all areas of its use.
Broadband access for households
The proportion of households with broadband (fixed and mobile) Internet access in developing countries is estimated to have increased from 37.6% in 2015 to 41.1% in 2016 and 42.9% in 2017. However, this is a global average that masks deep regional differences: households' technical accessibility ranges from 18% for Africa to 84.2% for Europe (2017).
One emerging metric in this regard is the number of smart homes, or homes equipped with remote control devices via smartphones and computers. in Europe and North America the number of smart homes in 2015 reached 17.9 million, of which about 12.7 million (56%) are located in North America. This number is expected to rise to 46.2 million by 2020, equivalent to 35% of all North American households. The European market is two to three years behind. According to the forecasts of the consulting company Berg, by 2020 there will be 44.9 million smart homes in Europe (approximately 20% of European households).
Current global broadband development trends
The digital divide between countries is usually measured by the development of Internet access, but differences in access speed and quality of service (QoS) are also important. According to Akamai, the average global broadband connection speed has steadily increased by 15% per year and reached 7.2 Mbps in the first quarter of 2017. Average connection speeds increased in 114 of the 149 ranked countries and regions. The top ten in terms of average connection speed includes all OECD countries except Hong Kong.
In Russia, the average broadband speed is 11.8 Mbps. This is the 44th place in the world, against 28.6 Mbps in the Republic of Korea, which ranks 1st. - Approx. comp.
GCI data shows that investments in ICT infrastructure can set off a chain reaction that will bring about digital transformation. Clouds are the catalyst for this reaction: they reduce the time for a country to receive economic benefits from Big Data and IoT, which will ultimately contribute to growth and prosperity.
But the use of clouds requires a high-performance and affordable broadband network. A country that increases investment in ICT infrastructure by 10% between 2016 and 2025 will recoup that investment handsomely: each additional dollar of investment in ICT infrastructure can return $3 in GDP today, $3.7 in 2020, and In 2025, the refundable amount will increase to $5. This would mean an increase of $17.6 trillion in global GDP, equivalent to the size of the European Union's GDP in 2016.
Over the past year, there has been an impressive growth in the number of new IXPs, an important form of infrastructure development that can reduce broadband latency and reduce transit costs. From mid-2016 to mid-2017, 24 additional countries created new IXPs, according to Packet Clearing House. There are 145 IXPs in the EU as a whole. Eight countries have more than ten national IXPs, including: USA (84), Brazil (27), Russia (21), Argentina and Germany (20), Australia (18), France and Japan (16).
Mobile telephony and mobile broadband
The importance of mobile communication cannot be overestimated in terms of its economic and social importance. The GSMA estimates that mobile access contributes about $3.1 trillion (about 4.3%) to global GDP and about $431 billion in investment, and creates 32 million jobs directly or indirectly.
The use of the Internet is largely and steadily increasing through mobile devices (approximately half of all web traffic on average). Media agency Zenith forecasts even higher: three-quarters of all Internet traffic in 2017 will be generated through mobile access, via smartphones and tablets.
But in this assessment, the type of device should not be confused with the type of access, since mobile devices often operate over Wi-Fi, over fixed networks.
Smartphones currently make up just under half (48%) of mobile devices worldwide. They provide consumers with the opportunity to use rich interactive applications (Rich Interactive Applications, RIA), which ultimately improves the quality of life, gives a tangible socio-economic effect. The WIK study showed that a 10% increase in RIA use added about $5.6 trillion (0.33%) to global GDP, which is more than similar economic indicators for traditional telecommunication services in a group of 164 countries from 2000 to 2015. Ericsson estimates that by the end of 2016, 3.9 billion smartphones were connected worldwide. GSMAi predicts that there will be about 5.6 billion by 2020.
In terms of mobile telephony, by the end of 2016, according to the GSMA, there were 4.79 billion unique mobile subscribers, and this number will exceed 5 billion this year. By 2020, there will be 5.6 billion unique mobile subscribers globally, which is more than the estimated number of people who have electricity in their homes (5.3 billion), bank accounts (4.5 billion) or running water (3.5 billion).
Mobile telephony is much more widespread than Internet access. The number of cellular subscriptions is 7.7 billion, exceeding the world's population of 7.6 billion; about two-thirds of the world's population has personal access to mobile phone versus 48% with internet access.
At the same time, analysts note a pronounced trend towards convergence of these indicators. Over the past 25 years, mobile operators have built powerful network infrastructures for voice and digital services. Their full upgrade to 3G and 4G technologies is the most cost-effective way to reach 95% of the world's population with broadband access within five years. The main obstacles to the growth of the number of active users are no longer the availability of network technologies, but rather digital illiteracy, as well as the availability of digital services that are relevant to the community.
In the meantime, the race towards 5G has begun, driven by the ITU standardization process under the IMT-2020 vision and the prospect of global harmonization of millimeter-wave bands for IMT-2020 at the upcoming World Radiocommunication Conference (WRC-2019). A sufficient amount of harmonized spectrum in different frequency bands is a prerequisite for the global availability of mobile broadband.
Investments in the development and modernization of broadband networks
As noted, competition, regulatory intervention, declining average revenue per user (ARPU) and slowing user growth are having a significant impact on operators' revenues and investment opportunities. Despite short-term bursts in revenues (in 2015 they grew by 2.2%), in 2016 revenue growth slowed down significantly.
Since 2010, mobile operators have invested $1.2 trillion in developing broadband networks and increasing their capacity. Global annual capital expenditures, having peaked at $197 billion in 2015, fell 6% in 2016. In the period up to 2020, their further decline is predicted. A particularly strong decline in capital investment, by almost 10%, occurred in emerging markets. GSMAi predicts that this decline will continue in the medium term.
Given the predicted decline in operators' capital investment over the coming years, alternative solutions are needed. Both the private sector and the public sector play an equally important role here. The state organizes incentive regulation, develops well-thought-out plans and strategies, introduces preferences and benefits, and participates in financing activities that are necessary for the state and society, but do not bring income to operators.
In this aspect, it should be noted that in Russia there is virtually no targeted regulation of the development of broadband communications in order to form a single digital space of the country and in the interests of consumers. Combined with “regulatory intervention”, such as the implementation of the “Yarovaya law” and similar ones at the expense of operators, and not the state, as in other countries, this threatens the very possibility of private investment in the network. The inevitable increase in tariffs will not provide the necessary funds due to the inevitable decrease in the affordability of broadband access, the Internet, and applications. - Approx. comp.
Meanwhile, the private sector, operators, are developing new business models, offering new platforms and services, which can increase the pace of innovation, introduce new services and raise revenues, as well as apply cheaper operating models, in particular the sharing of infrastructure (passive and active network elements) and national roaming without government subsidies or investment in its implementation.
Governments and policy makers should consider these sharing models as the preferred approach to expand broadband opportunities, as they can help maintain competition, commercial and technological sustainability. Infrastructure sharing models (including government needs) can cut capital and investment costs by 50-70% while maintaining revenue.
It is important to note here that the terms "mobile" and "fixed" can only refer to access networks, to the last mile. And the basic, supporting, trunk, etc. high-speed telecommunication networks of the next generations (NGN) - the basis of ICT infrastructure and the Internet - are convergent and technologically neutral, i.e. functionally unified regardless of the type of access, operator, services provided, which allows integrating both networks and their resources.
Our operators by mutual agreement already practice this integration. However, in the absence of a modern digital national infrastructure based on NGN and plans for its formation, the above effect indicators in the coming years in Russia are unattainable. Therefore, in particular, the introduction of even intra-network roaming will lead to an increase in tariffs for everyone who does not use it. - Approx. comp.
Next generation networks and fixed broadband
The processes of evolution in fixed lines and continuous technological modernization with the transition to modern broadband networks continue. As defined by ITU-T, a next generation network is a packet-switched network in which service-related functions are independent of underlying communication technologies. On a single platform, such a network provides not only communication services, but also access to an unlimited list of content, ICT benefits, and other services that the user chooses.
Traditional copper access networks are being upgraded to G.fast (up to 2 Gbit/s), which is widely practiced in the EU countries. Deloitte (2017) predicts that by 2020 the number of gigabit connections in the world will reach hundreds of millions. Ovum expects about 30 million homes and businesses worldwide to use G.fast.
It should be noted that since 2015, the spread of fiber-optic gigabit access networks has accelerated in the world, in terms of coverage of which Russia is not inferior to the EU countries. For example, the Moscow City Telephone Network, which has 4 million subscribers, is switching to FTTH using GPON technology - “fiber to the apartment”. - Note. comp.
By the fourth quarter of 2016, the total number of fixed broadband subscribers in the world amounted to 855.9 million, which is 10% more than a year earlier (777.5 million). According to Point Topic, the top ten countries in terms of fixed broadband subscribers remained unchanged. In 2016, Russia overtook France in this ranking. In Q1 2016, China surpassed a quarter of a billion fixed broadband subscribers and continues to grow at an impressive rate, adding about 92 million FTTH connections during 2016. Point Topic reports that this increase is almost equivalent to the total number of fixed broadband subscribers in the US.
In parallel with technological modernization, ADSL is being phased out. For example, in November 2016, the Swedish fixed and mobile operator Telia Eesti announced plans to phase out ADSL services for about 90,000 of its broadband users by 2020, upgrading subscriber lines to alternative technologies. Approximately half of these customers will migrate to fiber, 40% to VDSL2+ and G.fast, and 10% are expected to use LTE by 2020.
Next generation satellite broadband
Satellite communications are carried out using point-to-multipoint technology and can create broadband coverage of an entire region within a limited frequency range, signal strength and packet delay parameters. New satellite systems surpass traditional ideas about their speed, power and latency. Many operators have recently deployed or plan to deploy systems that can connect 1.5 billion people worldwide.
An effective solution to the problems of broadband access is high-performance satellites in stationary orbits (HTS) - 36 thousand km above the equator. HTS spacecraft generate a large number of very narrow steerable beams. These beams carry strong signals and are electrically isolated from each other so that the same allocated frequency bands can be used multiple times.
For our country, where such spacecraft are already in operation, the system is of limited use, as it does not cover the northern regions, and individual VSATs have become too expensive for the mass consumer. - Approx. comp.
Another innovation in the field of satellite technologies is broadband communication using non-geostationary satellites (NGSO) in medium altitude circular orbits (MEO) (2-36 thousand km) and low-earth orbit (LEO) vehicles at altitudes of 400-2000 km. To ensure continuous customer service, at least several dozen NGSO satellites and a complex system of their interaction are needed.
Today, the most promising project in this direction is the O3b (OneWeb) system, which provides a common throughput 192 Gb/s, up to 1.6 Gb/s per bunch and latency less than 150 ms. The system is designed to provide trunking services, mobile services, fixed broadband access and satellite communications anywhere on earth. OneWeb plans to create a LEO system of 648 satellites, providing download speeds of 25 and 50 Mbps.
The report emphasizes that a combination of different communication technologies is required to form a national digital infrastructure. Fiber optic cable, satellite networks and terrestrial wireless systems are not mutually exclusive or competitive. Only together they form modern national broadband systems.
CompanyJ’ son & Partnersconsulting presents a brief summary of the study of the Russian market of fixed broadband access (BBA) among private users .
Russian market by number of fixed broadband users ranks 1st in Europe and 4th in the world. More fixed broadband users only in China, USA and Japan. In terms of penetration, Russia ranks 8th among the 10 largest global fixed broadband markets, ahead of China and Brazil.
Key Research Questions
In the report “Main indicators of the fixed broadband access market in Russia. Development Forecast until 2025” analyzes the total market volume, market structure by technology and competitive situation, as well as forecasts for further market development.
The practical value of the study
- Estimation of the number of subscribers and the size of the fixed broadband market;
- market structure dynamics by technologies and access speeds (tariff plan);
- general forecast of the structure of the broadband access market by types of mobile and fixed access;
- prospects for the development of key market indicators until 2025;
- description and analysis of key legislative initiatives in the field of communications;
- more than 40 profiles of regional operators with an assessment of their activity, strengths and weaknesses.
The target audience
The study is intended for fixed-line data transmission operators providing their services in Russia or intending to enter the Russian market of fixed broadband Internet access, investment companies, research agencies and other companies participating or potentially interested in participating in the broadband Internet market in Russia.
Study Summary
Description of the fixed broadband market
The market for fixed broadband Internet access in Russia is in the saturation stage. Market growth rates continue to decline, and in the short term they will not exceed 1-2%.
According to preliminary estimatesJ" son & Partnersconsulting, in 2015 the number of fixed broadband users in Russia increased by 2% to 30.3 million users.
Assessment of the competitive situation
The total subscriber base of the top 5 players grew by 490,000 subscribers, an increase of 2.5%. In 2015, Rostelecom and MTS showed strong growth - 284 and 147 thousand subscribers, respectively. In its comments to this press release, Rostelecom notes that the high rates of network construction ensure the growth of “optical” broadband subscribers at a rate above the market.
The leaders of the rating are still Rostelecom and ER-Telecom. In 2015, there were changes in the rating of broadband access operators. MTS moved into third place in terms of the number of broadband subscribers, displacing VimpelCom to fourth position.
As noted in ER-Telecom in the comments below, the company managed to meet its revenue and subscriber base targets due to organic growth and M&A deals. At the end of 2015, the subscriber base of broadband access services reached 2.8 million. TTK reports that its subscriber base grew faster than the market - 6% in 2015. NETBYNET reports that they have been able to maintain their subscriber base in the regions where the company has a leading position and build a base in growing markets. The AKADO Telecom operator also comments that, despite the dumping of the main players, in 2015 the company managed to maintain client base broadband access and increase the share of users of complex services (Internet + digital TV).
The main trends in the Russian market of fixed broadband Internet access among private users:
- Growth of high-speed tariff plans (100 Mbps and more)
Over the past 2 years, the proportion of users who chose tariff plans with a speed of 100 Mbps or more, has doubled. Tariffs with a speed of 1 Mbps and below are almost a thing of the past, they account for no more than 3% of connections.
- Growth of connections on optical technologies, includingpon
The growth of video services on the Internet requires more and more bandwidth for comfortable use of the broadband access service. In this regard, there is an active spread of optical technologies in the construction of data transmission networks (to the FTTH apartment, FTTB building, etc.). According to J "son & Partners Consulting, in 2015, the growth of FTTH / B subscribers amounted to 12%. ADSL technology continues to lose ground. So, in the 2nd quarter of 2015, the predominance of "optical" users over "copper" users in the company Rostelecom, which clearly shows the obsolescence of ADSL and the gradual departure of this technology from the Russian broadband market.
- Growing penetration of devices with broadband access and their diversity (Multiscreen)
In Russia, the diversity of access devices is growing and the gradual replacement of desktop computers with portable ones continues. According to J "son & Partners Consulting, in Russia in 2015, 53% of families used desktop PCs, 63% used laptops. In addition, over the past three years, the average retail price of a smartphone and tablet PC has decreased, even taking into account price increases in 2015 These devices have become available to people with almost any income level, and their sales have increased significantly.Thus, different family members began to actively use broadband access from different devices and often simultaneously.
Industry Opinions
As part of the preparation of the study, J "son & Partners Consulting specialists interviewed key players in the fixed broadband market and learned their opinions on the main trends in the corporate market.
Artem Chermenin
PJSC Rostelecom, Head of Mass Products Department
In 2015, Rostelecom continued building optical access networks at a record pace for the company. For 9 months of 2015, networks of up to 4 million households were built, in December the total technical coverage reached 30 million households (the plan in accordance with the strategy is 33 million households). Thus, Rostelecom will ensure the competitiveness of access networks for many years to come with the ability to provide any range of services. Such rates of construction ensure the growth of “optical” broadband access subscribers at a rate above the market. At the same time, the reduction in the number of broadband subscribers connected via copper continues. In 2015, for the first time, the number of "optical" subscribers exceeded the number of "copper" ones: 52% versus 48%. This is a very important result for the company. Also, the active construction of optical networks stimulates the growth of the second flagship segment of the company - Interactive TV, the number of subscribers of which is growing by 25% year on year.
In terms of product offerings, the company prioritizes packaged solutions (Internet + TV). In a difficult economic situation, we focus on price advantages. The main word of 2015 in this regard was "Forever": we developed and offered packages with favorable rates that will never change. That is, tariffs will remain low forever, and not just for a certain promo period. In addition, if a subscriber simultaneously uses a home telephone from Rostelecom, then additional preferences are provided for him. It is package offers that ensure the loyalty of the subscriber base and work to reduce churn.
Andrey Chazov
Dom.ru, marketing director
One of the main trends is the actualization of the speed characteristics of tariffs: there are more and more offers with a speed of more than 100 Mbps.
The continued growth in the number of devices that require Internet access, including wireless, continues to have a significant impact on the market. Increased requirements for the quality and comfort of using services lead to an increase in demand for dual-band routers that operate at two frequencies - 2.4 and 5 GHz - and provide a stable Wi-Fi signal. There has been a trend towards the closure of torrent resources that impede the development of the industry. More and more users are starting to consume licensed content.
The key to successful attraction and retention of subscribers is the high quality of services and services: consistently high speed Internet access and no gaps, high-quality image and a large number of digital and HD channels, additional services, availability of the call center, efficiency in resolving any issues. Our company plans to continue actively developing the installed network capacity in all 56 cities of presence, implementing an effective package strategy and offering profitable terms when connecting mono services. We plan to develop OTT and other services that are on the periphery of two services - Internet access and digital TV. For example, more and more users want to watch video content from mobile devices and when it is convenient for them.
We met our revenue and subscriber base targets through organic growth and M&A deals. At the end of 2015, the broadband access subscriber base reached 2.8 million people.
Alexey Nazarov
NETBYNET, Head of Mass Market Business Development
In every industry, there is a so-called break in time: a period in which the market undergoes irreversible changes. In other words, there comes a point of no return, when there will never be again. In the fixed-line market, such a moment began in mid-2014, and now the arrows have irrevocably taken us to another era. The era of fast growth in the fixed broadband market is over. Now everything's rising more provided by additional services based on the usual services: Internet access, pay TV and telephony. The development of OTT video services has begun actively, and last year there were many steps aimed at providing an even better service. Another indicative moment was that the term "Cost Effective" has become almost the most popular in the strategy of many of our colleagues on the market.
We firmly decided that we will not enter into price wars with market partners, since such a strategy will destroy the market much earlier than those who play "sell at any price" will receive any dividends from this. We will continue to bet on new products, quality and service, and we encourage our colleagues in the market to do the same. We have introduced a new bonus program, developed and implemented various promotional and product cases for existing customers, upgraded the network where necessary. In 2015, NETBYNET customers began to actively buy package offers, which allow significant savings. For example, buying services within the Wifire package, you can save up to 30%.
Maxim Chernov
AKADO Telecom, deputy CEO for commercial activities
The main trend is a slowdown in market growth associated with the difficult economic situation in the country, a drop in household income, the lack of import substitution of Internet equipment, the absence or reduction of investment in the construction of new networks and an increase in the cost of broadband access services. Therefore, all the efforts of the operators were aimed at maintaining the existing subscriber base: companies increased speeds, reduced tariffs, improved package offers, and refused promotional offers that contribute to the outflow of subscribers.
For home Internet users based on broadband access, AKADO Telecom plans to launch such services as Security Alarm, Video Surveillance, and Home Automation. We focus not only on providing high-speed and reliable channels, but also on creating a high-speed high-quality home Wi-Fi network for subscribers using modern additional equipment. In 2015, we significantly expanded the line of such equipment - these are premium Wi-Fi routers, Wi-Fi repeaters, PLC devices that allow you to reliably connect any device in the house to the Internet without additional wires. In the near future, our company plans to introduce additional service work for computer technology clients - "Emergency computer help".
As for the subscriber base, despite the dumping of the main players, in 2015 we managed to maintain the broadband access client base and increase the share of users of complex services (Internet + DTV).
Oleg Leonov
"TTK" Head of Sales and Service Department
The main trend in 2015 is the saturation of the broadband access market and the slowdown in its growth. The subscriber base of TTK in 2015 grew faster than the market: the annual growth of TTK subscribers was 6%.
Against the backdrop of a slowdown in organic growth, there has been a trend towards the acquisition of big companies smaller players and we expect this trend to continue in 2016. Price competition has intensified, users can get more and more high speed access for less money.
For further successful development in the market, our company focuses on maintaining the high quality of the main service - Internet access. As our practice proves, it is the quality of service that is the main tool for retaining users, without which any traditional loyalty programs are of little importance.
Detailed results of the study are presented in full version report:
“Key indicators of the fixed broadband market in Russia. Development Forecast until 2025”
The number of wired Internet users in Russia (broadband access, broadband access) in 2017 increased by 4.3% to 32.9 million. This follows from the report of TMT Consulting. Revenue from their services increased by 3.7% to RUB 130.1 billion. At the end of the year, the penetration of broadband access in Russian households amounted to 58%.
At the end of 2017, Rostelecom had the largest increase in the subscriber base - the number of its subscribers increased by 400,000 (3.4%). TMT Consulting connects this with the active construction and modernization of networks by Rostelecom. On the 2nd place in terms of growth - "Er-Telecom Holding". During the year, the number of its users increased by 386,000 (+12.4%). These are the fastest growth rates among the largest Russian providers. A significant part of the new subscribers went to the company through mergers and acquisitions. In particular, ER-Telecom Holding bought Novosibirsk Novotelecom last year, Akado in St. Petersburg and the Sverdlovsk Region, and Columbia Telecom in Volgograd, the report says.
Vimpelcom for the first time in the past few years not only managed to stop the decline in the subscriber base of broadband access, but even increased the number of users of this service by 3.2%, according to the TMT report. Analysts attribute the growth to the development of the All-in-One convergent offer (free home Internet for users of cellular tariffs of the All family). The base of home fixed Internet users was steadily declining in 2013-2016, notes Irina Yakimenko, an analyst at TMT Consulting.
« Rostelecom» continues to expand into small towns and villages, notes its representative Valery Kostarev. In 2014-2017 The digital divide operator has built 46,000 km of new fiber-optic communication lines, covering more than 5,600 villages and other settlements, he says. Rostelecom's base is also expanding in large cities, where the operator has built optical access networks for up to 33 million households, adds Kostarev.
The strategy of acquiring assets in the broadband market is now the most effective way of development retail business providers, says Iskratelecom CEO Alkhas Mirzbekov. According to him, another way of development is working with developers and providing broadband access services in new buildings. In Moscow, the market has already been formed - and the growth of subscriber bases of certain providers is associated with the reconnection of customers from one provider to another, says Mirzabekov. It is possible that the shares of players in the Moscow market will change during the renovation, he predicts.
Active marketing and convergent tariffs allowed Vimpelcom to increase the user base, its representative Anna Aibasheva notes. In 2017, the number of All-in-One users has nearly doubled to over 870,000, she says. More than half of those who connected are new subscribers who have not previously used the company's mobile or fixed-line services, Aibasheva says. According to her, the development of fixed communications is one of VimpelCom's strategic priorities in 2018.
The growth of the subscriber base of ER-Telecom in 2017, the representative of the company connects with local operators. He also talks about the development of digital products and services. In 2017, ER-Telecom paid much attention to the quality of services, improvement of customer and technical service, modernization of the network and subscriber equipment, the representative of the operator lists.
Broadband Internet access(abbreviated BBA) is also called high speed access, which reflects the essence of this term - access to the Network at high speed - from 128 kbps and higher. Today, when even 100 Mbps are available to home subscribers, the concept of "high speed" has become subjective, depending on the needs of the user. But the term broadband access was introduced at the time of widespread dial-up access (dial-up), when a connection is established using a modem connected to the telephone network common use. This technology supports a maximum speed of 56 kbps. Broadband access involves the use of other technologies that provide significantly higher speeds. However, a connection such as ADSL technology with a data rate of 128 kbps also applies to broadband access.
From the history of broadband technology development
Approximately in the early 2000s. dial-up technology (dial-ap) has been actively replaced by xDSL technologies (ADSL, HDSL, etc.), which provide a significantly higher access speed. For example, ADSL2+ technology allows you to download data from maximum speed 24 Mbps, and give - at a speed of 3.5 Mbps. To obtain access using xDSL technology, a modem and a telephone line are also used, however, unlike dial-up access, the line is not fully occupied, that is, it remains possible to use both the telephone and the Internet at the same time.
Broadband today
Today, broadband Internet access is available on various technologies- both wired and wireless. The former include the xDSL family of technologies, DOCSIS technology (Data Over Cable Service Interface Specifications - data transmission over a television cable), (data transmission in computer networks using twisted pair, optical cable or coaxial cable), the FTTx family of technologies (fiber to the x - optical fiber to point X) and PLC (Power line communication - data transmission using power lines). As for FTTx, there are two basic varieties, though, in fact, they differ little from each other - (fiber to the building - fiber to the building) and FTTH (fiber to the home - fiber to the house).
Today, wireless Internet access technologies, especially mobile ones, are being actively introduced and developed. Fixed wireless access is provided through satellite internet, technology and fixed . However, many operators cellular communication And wireless providers offer . develop technologies of the "third generation" () and higher, which include communication standards such as, etc. Mobile WiMAX competes with these technologies. Technology-based services can be expected in the near future newest generation- and (3GPP Long Term Evolution), which provides data transmission up to 173 Mbps for reception and 58 Mbps for upload.
Broadband operators
The largest broadband access operator in Russia is the company "", represented in all regions of the country. Rostelecom, through the acquisition of a number of RTOs (interregional communication companies), provides broadband services using various technologies. According to the iKS-Consulting analytical agency, as of the end of the 1st quarter of 2011, Rostelecom occupies 36.1% of the Russian broadband Internet market in the segment of private users. The top three also includes "" (""), with market shares of 9.5% and 8.3%, respectively. These operators provide Internet access both through wired and wireless "third generation" technologies. So, for example, MTS, having acquired the company "", became a major operator of Internet access services for ADSL technologies and ADSL2+ and . Beeline, in addition to services wireless access and mobile communications, provides the service " Home Internet» using FTTB (fiber to the building) technology.
In fourth place with a market share of broadband access of 7.7% is the operator "", providing Internet access services under the brand "Dom.ru" using FTTB technology. The Akado company closes the top five of the Russian broadband access market with a share of 3.8%. The operator provides Internet access using DOCSIS and Fast Ethernet technologies.
The remaining Russian broadband providers occupy less than half of the market - 34.6% fall to their share.
Penetration of broadband services
According to iKS-Consulting, in the first quarter of 2011 the penetration of broadband Internet access in Russia reached 36%, the number of subscribers in the private segment amounted to 19 million users. But it should be taken into account that in the local markets, local players - for example, providers in St. Petersburg or providers in Moscow - can occupy significant shares, overtaking these large players in the total subscriber base. In St. Petersburg, among such players: "" (InterZet), "" (brand "", which, however, is now part of Rostelecom), ("SkyNet"), etc. In Moscow, one can mention such companies,.
According to TMT Consulting's preliminary estimate, at the end of 2017, the number of broadband Internet access subscribers in the retail segment in Russia reached 32.6 million, penetration - 58%. The market volume amounted to 130.1 billion rubles, ARPU - 339 rubles.
According to the forecast of the company's analysts, no significant changes in ARPU are expected in the near future. On the one hand, the popularity of convergent offers continues to grow, diluting revenue between Internet access, pay TV, telephony and mobile services. On the other hand, due to the migration of subscribers to higher-speed tariff plans, a significant decrease in ARPU is also not expected.
TOP-5 Internet providers at the end of 2017 form 69% of the subscriber base of broadband Internet access in the B2C segment in Russia.
- Rostelecom remains the leader in absolute subscriber base growth, having increased the number of its broadband users by almost 400,000 (or 3.4% compared to 2016). Rostelecom is the largest operator in the Russian fixed Internet access market and serves 37% of individual subscribers. The company accounts for about 40% of revenues in this market segment. The growth driver of the operator remains the construction and modernization of networks (transition to FTTB and PON access technology), at the same time, the company is actively updating tariff and package lines. In 2017, the operator increased the number of its subscribers both in the regions and in the saturated Moscow market.
- ER-Telecom ranked second in terms of absolute growth in the subscriber base with a result of 386,000 new customers. In relative terms, the growth rate of the operator was the highest among the TOP-5 and amounted to 12.4%. A significant part of the new subscribers was brought by the acquired companies: Novotelecom from Novosibirsk, Akado in St. Petersburg and the Sverdlovsk region, Columbia Telecom in Volgograd. In addition to issues of extensive development, in 2017 ER-Telecom implemented a project to modernize and expand the network.
- In third place in terms of increasing the subscriber base is MTS (by 218 thousand subscribers - 7.7%), while, unlike its closest competitors, the growth of the provider's subscriber base in 2017 was only organic. The growth in the number of MTS users occurred both at the expense of MGTS and at the expense of the regions. The company carried out work on targeted expansion and modernization of fixed-line networks in regional markets. In the Moscow market, MGTS, a member of the MTS group, occupies a leading position (serves about 33% of broadband subscribers). At the end of 2017, MGTS continued to strengthen its position in the Moscow market, demonstrating an increase of 91,000 users compared to 2016.
- The increase in the subscriber base of the TTK operator amounted to 134 thousand subscribers (or 8.8%). This year, the operator focused on the introduction of new services: it began to develop IPTV services, and also launched its own OTT service "TV Without Borders".
- Thanks to increased marketing activity, VimpelCom for the first time in the past few years managed to stop the decline in the fixed broadband subscriber base and increase the number of service users by 3.2% compared to 2016. The company's main successes in the fixed broadband market are related to the development of the All-in-One convergent offer. At the end of 2017, about 39% of the company's broadband access subscribers (or 870,000) used the offer.
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