FOCUS: Major mobile operators spare no money for soaring telemedicine market

By Yekaterina Yezhova

MOSCOW, Dec 3 (PRIME) -- VimpelCom has become the last of Russia’s four major mobile operators to enter the telemedicine market, valued by experts from 3 billion to 18.5 billion rubles. Operators invest heavily in healthcare services to widen the non-voice income, and analysts expect to see hot rivalry in the industry, which will later become an element of the Internet of Things ecosystem.

“Telemedicine is considered to be one of the most fast-growing healthcare segments in the world. The global digital medicine market will expand some 20% in the next five years. At present, the U.S. has the most advanced telemedicine market,” investment company Freedom Finance Anastasia Sosnova told PRIME.

Estimates of Russia’s telemedicine market vary greatly, because different companies calculate different services she said. “Analysts agree on a 10 billion ruble figure for the 2018 market,” she said.

Investment company Algo Capital senior risk manager Vitaly Manzhos said the country’s market of telemedical services will triple on the year to 3 billion rubles in 2018.

Major local mobile operator MTS, which launched telemedicine service SmartMed in April, expects the market to reach 18.5 billion rubles in 2018. “We think the compound annual growth rate (CAGR) of the local telemedicine market could amount to about 30%. So, the industry could weigh over 68 billion rubles by the end of 2023,” the operator’s press secretary Alexei Merkutov said.

VimpelCom, working under the Beeline brand, launched the service and application My Doctor so that its clients can receive online professional medical consultations for a subscription fee of 199 rubles or 499 rubles.

Mobile operator MegaFon launched its MegaFon Health service at the end of 2017 and opened it to subscribers of all the other operators in the +7 zone on November 26. An urgent online consultation costs 499 rubles and a prescheduled one 799 rubles.

The country’s fourth major operator, T2 RTK Holding, working under the Tele2 brand, joined the telemedicine market in June through partnership with medical firm DOC+. The operator’s head for strategic communications Olga Galushina said the service offers a month of free consultations with a following subscription for unlimited online visits costing 5 rubles a day. A consultation lasts on average 28 minutes, she said.

“Such projects appeal to the major mobile operators because the companies have a technical base and infrastructure, which need a higher commercial load. On the other hand, telemedicine is a good addition to other non-voice services. Economically, their costs will largely be spread among fixed costs,” Manzhos at Algo Capital said.

The analyst assessed VimpelCom’s primary expenses on the launch of the telemedicine project at least at 300 million rubles. “Evidently, investment won’t be limited to the initial spending on design of the mobile application and the platform. Most likely, promotion of the new product will entail impressive expenses,” he said.

At the beginning of 2016 state-controlled fixed-line operator Rostelecom agreed to pay 130 million rubles to the Moscow State University for designing and creating an automated online medical consulting and monitoring system, Manzhos said.

Sosnova at Freedom Finance said VimpelCom’s service could cost 50 million rubles and more. “An average price of telemedical consultations will be several times less than face-to-face consultations, while high-tech projects and their promotion are costly. I can suppose that telemedical projects will start paying back in three and more years on average,” she said.

MTS invested about 30 million rubles in the first stage of its product SmartMed. “The service is available for subscribers of all Russian operators. The number of clients rises monthly by more than 30%. We also see a stable growth of the people who after an online consultation go to the same doctor or vice versa,” the operator’s spokesman Merkutov said.

“It’s important that cooperation with one wide clinic chain (Medsi, which, like MTS, is a part of multi-industry holding Sistema) allows us to integrate the solution into the partner’s IT system, ensuring a single patient card regardless whether communication is online or offline.”

The most popular specialists in SmartMed are physicians and pediatricians, as well as cardiologists and endocrinologists, whose consultations are in demand because of a rising number of cardiac diseases and diabetes cases, Merkutov said.

Galushina at T2 RTK Holding said the operator sees a high demand in consultations of physicians, pediatricians, gynecologists, and gastroenterologists with 30% of requests asking to decipher analyses.

Manzhos at Algo Capital said that despite an evident innovative character of telemedicine, the market could become highly competitive in the next few years. “Already now, at least five quite big similar services are evolving. Three of them are created on the technological base of MTS, MegaFon, and Rostelecom. So far, the existing projects focus on private chains of clinics, and a reasonable level of rivalry will benefit the consumer,” the analyst told PRIME.

To assess commercial prospects of telemedicine, its development should be taken into consideration. At the first stage, such services stipulate provision of online consultations with doctors and a remote monitoring. But a soaring evolution of the Internet of Things presumes that objective data on a physical state of a patient will be remotely gathered via electronic meters and analyzers. “For connection operators, it translates into a growing share of the non-voice subscriber base, a very stable one,” the Algo Capital analyst said.

“A growth potential in the long-term could be valued as high because of a general trend of switching traditional medicine to paperless technologies. The implementation of electronic systems in medicine unavoidably expands opportunities for remote forms of monitoring, diagnostics, and cure.”

(66.5335 rubles – U.S. $1)

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