Positive Subscriber Growth Will Continue in Russian Mobile and Broadband Markets

Dublin, May 11, 2011

Dublin, May 11, 2011-At the end of 2010, Russia had 219.48mn mobile telephony customers, equivalent to a penetration rate of nearly 154.6%. In 2010, the Russian mobile subscriber base grew by 5.9%. After experiencing a return to positive subscriber growth in Q310, all four of Russia's leading network operators - Mobile TeleSystems (MTS), VimpelCom, MegaFon and Tele2 Russia - continued to experience positive growth in the final quarter of the year, acording to a recent report by BMI.

The Russia Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Russia's telecommunications industry. The Q211 report on Russia's telecommunications industry contains revised forecasts for the country's mobile and broadband subscriber markets. BMI's new mobile subscriber forecast incorporates data for Q410 while BMI's new broadband forecast incorporates data for the third quarter of the year.

Despite Russia's high mobile penetration rate, BMI maintain their view that positive subscriber growth will continue for the duration of BMI's forecast. BMI's revised broadband subscriber forecast for Russia envisages almost 16.1mn broadband subscribers at the end of 2010. This was up from 12.9mn at the end of 2009. BMI estimate for Russia's broadband market includes mobile broadband subscribers who connect to the internet via USB modems. With a large number of operators channelling considerable resources into the expansion of broadband networks, BMI expects the cost of broadband services in Russia to fall considerably over the next few years. This will encourage faster subscriber uptake and sustain growth in the sector.

This quarter sees no further changes to BMI's forecast for Russia's fixed-line telephony sector. BMI are predicting a more pronounced decline in fixed-line subscriptions over the next few years.