FOCUS: MegaFon enters promising telemedicine market with online aid project

By Yekaterina Yezhova

MOSCOW, Nov 27 (PRIME) -- One of Russia’s major mobile operators, MegaFon, has entered a burgeoning market of telemedicine with online doctor consultations, the niche that is already being tapped by the company’s archrival MTS. Analysts said costs of the service’s maintenance may reach some U.S. $10 million in the first year of work, while the nascent market will boom in three years.

MegaFon jointly with Telemed Help, a platform for medical consultations, offered its Moscow subscribers an online medical consultation for 150 rubles per month, or 299 rubles for recommendations of more qualified specialists.

“We work with Telemed Help and plan to engage no more partners. Telemed Help is in charge of the whole medical part of the project,” Yulia Dorokhina, head of MegaFon’s press service, told PRIME, adding that the service will become available for the rest of the country from 2018.

As soon as the service application is installed on a smartphone, a user can get an online consultation via a video call with the system offering doctors of 39 specialties from 14 Moscow-based medical chains. The partners will share revenue.

Among direct competitors, Dorokhina mentioned Doc+, offering doctor home visits, and Yandex.Health, an online medical consulting service from Internet giant Yandex, which charges 99 rubles for the first consultation and 499 rubles for the following consultations.

MTS has been developing the digital medicine business since 2016. “We’re testing a telemedical service in teamwork with big private clinic chain Medsi,” the operator’s spokesman Dmitry Solodovnikov said, referring to the chain owned by the operator’s major shareholder, multi-industry holding Sistema.

“MTS Group’s own expertise is sufficient to fulfil the IT part of the project, while the medical part is secured by Medsi’s specialists. The telemedicine service will become the first step in development of digital medicine in MTS. In the future, we plan to introduce solutions working on artificial intelligence and other technologies to expand functions of existing services and create new ones in the eHealth sphere.”

Georgy Vashchenko, director of operations on the Russian stock market at investment company Freedom Finance, said the industry is growing rapidly. “Digital medicine is an international trend that emerged following progress of household electronics, including mobile devices, and telecommunications,” he told PRIME.

Corporate juggernauts such as Apple, Google, and Microsoft intensively invest in telemedicine. This market could reach $50 billion in 2020 with a compound annual growth rate of 17%. The industry takes advantage of low costs and convenience, he said.

Telemedicine has emerged as a great alternative to offline hospitals, so lawmakers acted accordingly, and regulations for this industry will take effect on January 1, 2018, the analyst said.

The decree signed by President Vladimir Putin in July introduced the notion of medical aid provision via telemedical technologies, including remote monitoring of patient’s health. Putin also ordered to provide all hospitals with the Internet within two years, and state-controlled telecom operator Rostelecom was appointed to do this.

“The Russian telemedicine market will reach its full potential in three years with market share accounting for 30% of hospital visits. Local companies do not disclose results, and I think they haven’t brought in profit yet,” Vashchenko said.

“Yandex.Health’s price is in the range from 99 to 499 rubles per consultation which is from five to 20 times lower than tariffs in traditional clinics and hospitals. “Medsi, one of the most popular private hospitals in Russia, has 21% profit margin. I believe that the new projects reach a break-even point in three to four years.”

An increasing market share is crucial for telemedicine. Investments in this type of service can reach $4 million, which includes $1–2 million on medicine and IT components and approximately the same amount on marketing.

“Operating costs will be the main factor to stop business expansion, not capital expenditures, so the main driver for telemedicine is sales. I think that expenses on maintenance of such a service in the first year of its work could be about $10 million,” the Freedom Finance analyst said.

(58.5318 rubles – U.S. $1)

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