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Russian cellular market: faster, bigger and more expensive
November 21, 2006 18:10

Today Russia is the worlds third country by number of mobile subscribers (140 million, which is equal to the population) yielding China and the USA only. Therefore, operators are expected to develop the market not extensively but intensively by means of new services for subscribers. Cellular penetration is usually estimated by the total number of SIM-cards thrown into the market and active at the moment. It should be mentioned however, that approximately 35% of Russian mobile subscribers possess several cards simultaneously, thats why the realistic cellular penetration in Russia makes up, by experts estimate, 62-65%.

Cellular rises in price

In recent 10 years cellular communications have done nothing but become cheaper. Nevertheless, this year the majority of experts notify a reverse tendency: chatting on the phone is on the whole getting more expensive, despite the abundance of so-called cheap rates. 2006 turned to be critical for Russian cellular operators, since the average income from a subscriber has reduced to historic minimum of $6.5 a month, which is half as less than the last year index. One of the main factors defining the tendency was enforcement of the new Communications Act and cancellation of incoming calls charges, as a result, operators initiated connection charges and tried, at least, to nail down the rate, at most, to raise prices for cellular communications in general.

The cellular market is in fact shared by operators whose ratio almost hasnt changed for two years already. In view of the changes operators replaced their growth at any cost strategy with another one primarily aimed at keeping their users databases. Willing to keep the clients operators have started offering long-term contracts including bonuses. Knowing the minute price has fallen a subscriber is gradually getting used to speak longer, and consequently an average sum of money spent on chatting per month increases.

In the nearest future a new range of cellular services may become more or less popular, but the very cellular Internet costs too much to be at least distantly compared in extension to common SMS. The service, which will probably gain popularity in the next few years, is e-mail check, since people need it constantly available. Experts, however, say it is not expected to spread the whole country over, as the majority of users consider their cell phones operate as a means of communication only.

Nevertheless, Russian cellular services prices compared to other countries still remain considerably low, about $0.088-0.112 per notional minute of talk. Bangladesh and Malaysia citizens are the only nations, who pay less ($0.052 and $0.10 per minute). Cellular is a little bit more expensive in Kirghizia, Ukraine, Turkey, Finland and Brazil, though the cost of the notional talk minute doesnt exceed $0.2 there.

People living in Spain, the Netherlands, the USA and Germany have to pay much more: Americans give $0.294-0.334 per every minute, Germans - $0.380-0.493. The highest cellular prices are in Japan about $0.445-0.493 per minute.

Life rates are getting higher in cities, so that even children dont go out without their cell phones ready for serving the masters, and no matter how expensive the communication is - people will use it to make their business prosper or keep in touch with families and friends.



Olga Pletneva


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