Source Pravda.Ru

Russian Telecom Market Growing More Competitive

Last year was a watershed for alternative telecommunications operators in Russia. According to analysts J'son & Partners, 2002 was the first time that alternative operators (including competitive local exchange carriers, data communications providers, Internet service providers, cellular operators) outperformed incumbent operators in terms of aggregate revenue. The revenue share of alternative operators increased from 48% at the beginning of 2002 to 56% at the end of the year, due to faster revenue growth. Alternative operators witnessed growth of almost 53% compared to 2001, while incumbent operators saw growth of around 26%.

The revenue structure of alternative operators changed slightly last year. The share of local telephony decreased from 9.6% in 2001 to 8% in 2002; wireless services increased to 62% (up 2 percentage points). According to J'son & Partners' estimates, revenue growth for fixed line telephony in Russia was 35% in 2002.

During 2002, residential revenue grew continuously. At the end of the first quarter, the share of the residential segment was 33%, but by the end of the year this had risen to 54%. The primary reason was robust individual uptake of cellular communications services.

Although alternative operators outperformed incumbent operators in terms of revenue, by the end of 2002, they served only 15% of total lines (approximately 5 million) in Russia. As in previous years, the share of Moscow and St. Petersburg in the total revenue of alternative operators was significant, and by the end of the year accounted for two-thirds of their revenue.

J'son & Partners estimate that the leading alternative operator in Russia is Sovintel, with revenues from telecommunications services of USD 144 million in 2002. The leading alternative operator in St. Petersburg is PeterStar, with revenues from telecommunications services of USD 56 million last year.

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