Russia to invest $39 bn in mobile infrastructure mainly targeting 5G

Russia will lead the Commonwealth of Independent States (CIS) in the commercialisation of 5G services, with the region’s other markets all launching 5G networks by 2025, according to GSMA.
Russia telecom Capex and revenue forecast
The CIS region will have around 54 million 5G connections by 2025, an adoption rate of 13 percent. Operators are forecast to invest $39 billion in mobile infrastructure between 2019 and 2025, of which over 70 percent will be 5G-specific.

“Regional governments and regulators must adopt policies, such as access to spectrum, that encourage inward investment and encourage the development of the mobile industry,” said Mats Granryd, director general of the GSMA.

The CIS region had 235 million unique mobile subscribers at the end of 2018, with Russia, Ukraine and Uzbekistan together accounting for 80 percent. The region has a high unique subscriber penetration rate of 81 percent, notably in Russia which is approaching saturation point. Future growth will be limited to less than 9 million new unique subscribers in the CIS by 2025.

4G is set to become the region’s leading mobile technology in 2021, and will account for over two-thirds of total connections in 2025. 4G will overtake 2G as a proportion of connections in 2019 and will become the region’s leading mobile technology in 2021, the GSMA report said.

Only Belarus and Russia are expected to launch 5G by the end of 2020; 5G networks in the region’s other 10 markets will be live by 2025.

Delivering 5G connectivity will increase capital intensity for operators, while uncertainty around spectrum access could be a potential barrier to releasing value into the digital economy.

GSMA said the mobile industry contributed $101 billion or 4.7 percent of GDP to the CIS regional economy in 2018, which is forecast to increase to $122 billion (5.1 percent of GDP) by 2023. In 2018, the industry contributed 620,000 jobs through direct employment or indirectly through activity in the wider economy.

5G-related technologies are expected to contribute $34 billion to regional economy over the next 15 years.

Mobile revenue in the CIS is forecast to remain largely stable between 2019 and 2025. In certain countries, we expect greater smartphone adoption, 4G upgrades and growing data usage to deliver some revenue uplift.

The Internet of Things (IoT) revenue is set to reach $26 billion in 2025, driven by increased interest in smart cities and smart utilities.