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Russian Subscriber Growth - On the Brink of a Slowdown?
In the first quarter of 2009, the Russian market surpassed 190m customers and almost reached 135% penetration. The end-quarter total customer base of 190.65m was up by 22.81m year on year and the penetration rate of 134.8% was 16.6pp higher than the year-earlier figure. These are both strong gains, and they seem to indicate that growth is continuing unchecked. However, the quarterly figures suggest that Russia may be on the brink of a slowdown.
The quarterly gain of 3.03m was down from 4.42m a year earlier, and was in fact the lowest figure for two years. Indeed, with the exception of the Q1 07 figure of 1.76m, this was the lowest of the past six years. The cause of this slump lies in the performances of market leader MTS and third-placed MegaFon. MTS saw its Q1 net additions slide from 2.47m in 2008 to 0.48m in 2009. While MTS's Q1 09 figure was the second worst of the past seven years, MegaFon saw an even worse result: its 0.23m was the first sub-1m figure since Q3 03, and the lowest since Q3 01, when it had just 0.46m customers. At the end of Q1 09 it had 43.52m.
Second-placed Vimpelcom was the only one of the top three operators to perform well, recording a 1.67m gain in the quarter compared to a 0.14m loss in Q1 08. It finished on 49.35m. MTS was still well in the lead, however, with a total of 65.11m. In fourth place was Tele2 with 10.64m, up 0.22m quarter on quarter, while the Svyazinvest regionals (which include Uralzvyazinform, Sibirtelecom and Volga Telecom) added 0.32m to finish with an aggregated total of 14.81m.
The poor performance in terms of customer growth was accompanied by bad news in terms of ARPU. MTS saw its USD ARPU fall by 31.7% to USD6.90, although this was largely due to the crash in the rouble. However, even in local currency there was a 4.5% decline to RUB233.54. Vimpelcom saw a similar fall of 4.4%, which took its figure to RUB306.6. Meanwhile, Tele2 - the only other Russian operator to report this metric - saw a 5.4% drop to SEK53.
Posted to the site on 30th June 2009
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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