FOCUS: Mobile data turning into pillar of Russian operators’ revenue

By Yekaterina Yezhova

MOSCOW, Mar 21 (PRIME) -- Epidemic expansion of smartphones and other mobile devices in Russia has boosted the use of the mobile Internet, which is becoming one of the core income sources for mobile operators, offering cheap tariffs and devices to stimulate demand. Mobile data secure now a quarter of operators’ total revenue, and heavy content leads demand, analysts said.

“Mobile data transfer accounted for 25% of total incomes of connection operators in 2015, which is 5 percentage points higher than a year earlier,” Yevgeny Alminov, head of the cellular connection and digital devices department at J’son & Partners Consulting, told Russian Connection.

The number of mobile Internet users in the country grew by 1.7 million subscribers over the year to 28.5 million people as of the end of September 2015, or 40% of the total client base, according to MegaFon, one of the country’s leading mobile operators.

“The share of the mobile Internet in MegaFon’s total revenue in July–September 2015 went up to 26% from 21% a year earlier. Data average revenue per user (ARPU) also rose 15% to 244 rubles thanks to higher consumption of Internet services and promotion of bundle tariffs,” head of MegaFon’s press office Yulia Dorokhina said.

A fifth of VimpelCom’s mobile services revenue came from mobile data. The operator’s total mobile revenue rose 1% to 60.3 billion rubles in October–December 2015, while mobile data revenue grew 16% to 12.3 billion rubles. VimpelCom’s ARPU slipped 3% to 314 rubles over the reported period.

The number of VimpelCom’s mobile customers went up 4% to 59.8 million, including 34.3 million of data users, whose number rose 5% on the year. Data usage soared 30% to 1,712 megabytes (MB).

The country’s average price of the mobile Internet was below 0.1 rubles per 1 MB in 2015, Alminov at J’son & Partners said.

Dorokhina at MegaFon said the price of 1 MB has been unchanged for the last two years. “Internet is rather cheap despite crisis events in the economy and omnipresent inflation. MegaFon now charges 0.08 rubles per 1 MB, as much as it did before the crisis,” she said.

“At least once a week, 75% of smartphone owners used search services or browsers as of the end of September 2015, 56% visited social networks and 55% worked with e-mail. It should be noted that 48% watched video online and 35% listened to online music,” Alminov at J’son & Partners said.

“We think the last two indicators are important, because heavy content, like video, TV and music, showed the strongest growth in mobile traffic in 2013–2015.”

USB-modems used to be the core consumers of mobile traffic in 2012–2013. Owners of smartphones and tablets preferred to work with heavy content on desktop computers and laptops and used their mobile devices mainly for e-mail or navigation, Alminov said.

“With the expansion of LTE-supporting mobile devices in 2014–2015 and, what is also important, with the appearance of cheap operator tariffs with much traffic included, smartphones and tablets became key consumers of mobile traffic,” the analyst said.

“Average consumption of the mobile Internet per device is growing even faster than the number of smartphones and tablets. People now use mobile devices for online video, TV, music and heavy-content mobile games.”

Dorokhina at MegaFon said penetration of data transfer devices exceeded 50% as of the end of September 2015 as compared to 42% a year earlier. The number of 4G devices in MegaFon’s network spiked 50% over a year to 7.5 million devices. The 4G standard accounted for 40% of all traffic in MegaFon’s network in July–September 2015.

The growing segments of mobile Internet consumption are social networks and messengers, she said.

VimpelCom’s press secretary Anna Aybasheva said the volume of consumed 3G traffic almost doubled in 2015 and quadrupled in 4G. The share of LTE in consumption of the mobile Internet more than doubled.

“The number of 3G users remained flat in 2015, and the number of 4G users tripled. An average user consumed 30% more data traffic per month than a year earlier. The use of the mobile Internet via mobile devices per client increased: via feature-phones and smartphones by 60% and via tablets by 50%; via modems and routers by 20%,” Aybasheva said.

According to TNS Web Index, smartphones lead in surfing the mobile Internet: 84% of people used smartphones for this purpose in November 2015–January, as compared to 46% for tablets and 14% for feature phones. The poll was conducted in cities with the population of more than 100,000, among people aged over 12.

In terms of the operating systems, devices running on Android led the pack with 72% in February, while the share of iOS was at 23%, according to the data provided by Internet giant Mail.Ru Group.

(68.4026 rubles – U.S. $1)

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