Telecoms service revenue in Russia to dip 4% in 2020: GlobalData

Telecoms service revenue in Russia will drop by 4 percent in 2020, according to GlobalData research.
Russia telecom Capex and revenue forecast
The above chart prepared by GSMA Research indicates the forecast on Capex and revenue of Russian mobile operators during 2018-2025.

GlobalData did not reveal the specific revenue figures.

Fixed broadband services will be recording a positive growth in 2020. The pay-TV market is also expected to remain relatively resilient, GlobalData said.

To help curb the spread of the COVID-19, telcos in the country have restricted the operations of their physical point of sales.

The total number of mobile subscribers is expected to be approximately 2 percent lower in 2020 due to slowdown in new customer acquisition, and steeper disconnections in the prepaid segment partly driven by an expected decline in migrant labour force.

Beeline Russia closed a number of stores during the crisis, following government advice. By April 29, 34 percent of Beeline’s own stores and 25 percent of franchised stores were already closed. Store closures have contributed to the decline in device and SIM sales.

Beeline’s mobile service revenue has contracted on the back of declining roaming revenue and the sustained dominance of unlimited tariff plans.

Increased mobility and economic activity will support the recovery of the mobile market in Russia.

Major telecoms offer delivery of SIMs and selected mobile devices ordered online in order to offset the downside impact of the closure of a number of physical stores. The increasing use of digital sales channels, including eShops and the telecoms mobile apps, might help mitigate the negative impact from store closures and customers’ limited mobility.

Several telecoms announced an increase in fixed residential connections.  The business fixed broadband segment is expected to experience downside pressures on the short- to mid-term, amid a decline in demand driven by business closures and contracting ARPUs on the back of rising economic challenges.

The fixed broadband segment in Russia is dominated by fiber to the home (FTTH) which will make up 77 percent of the lines in 2020, says Houda Bostanji, EMEA Telecoms Research Director.

Fixed broadband penetration of households is forecast to reach 55 percent in 2020. There is room for growth in FTTH adoption, for both the residential and business segments. This will fuel the future expansion of Russia’s fixed services market revenue.