Market News


Summer Season of Mobile Sales Opens in May

May brought additional 1.27 mln of subscribers to Russian mobile networks. The opening of 'summer mobile sales' season in major cities and growth of regional networks resulted in above average net additions.

Starting the present issue we include into our ranking consolidated numbers of cellular subscribers of Siberia Telecom, Svyazinvest subsidiary that controls Eniseytelecom (Krasnoyarsk), Baykalwestcom (Irkutsk), STeK GSM (Kemerovo), Ulan-Ude Cellular Communications and several smaller networks. We believe that the company may consolidate its cellular assets into a single operator pretty soon.

Top 10 Cellular Operators

Company May 31, 2003 April 30, 2003
Total Moscow Total Moscow
MTS* 10,815,000 3,945,000 10,215,000 3,750,000
Vimpelcom 6,920,000 4,220,000 6,580,000 4,090,000
MegaFon** 4,004,199 409,000 3,820,199 403,170
SMARTS Group 758,400   703,900  
Uralsvyazinform 659,500   601,800  
Siberia Telecom 234,619   230,000  
N.Novgorod Cellular 233,100   212,700  
Tomsk Cellular Communications 145,799   135,278  
Ekaterinburg Cellular Communications 129,800   126,700  
Tatincom 126,000   124,868  

*including UMC of Ukraine (1.91 mln) and Belarus subscribers (140,000)
** including 6,500 in TT-Mobile (Tajikistan)

MegaFon enlisted its 4,000,000 subscriber in May while MTS demonstrated impressive growth in regional sales with more than 400,000 new subscribers joining the company in areas outside Moscow.

Vimpelcom announced results of its first month of operations in St.Petersburg. The company attracted more than 25,000 subscribers which is in line with its management projections. Vimpelcom's total subscriber base almost reached 7 mln in May. We expect that the company will enlist its 7,000,000th user in the first week of June.

Russian Cellular Market Breakdown, May 2003

The chart above includes only Russian subscribers, all CIS networks are excluded from the calculation.

Moscow Market

Traditionally, many Muscovites start commuting to their summer houses located in areas around Moscow in May, which results in growing share of pre-paid subscriptions of Moscow-based providers. Since cellular became an affordable service for the mass market, it remains a killer application for those commuting to dachas which usually do not have fixed-line phones installed.

This year the growth in subscriptions started early, already in May, with seasonal promotions and active advertising campaigns by all operators. MTS and Vimpelcom were more active and demonstrated better results than MegaFon that lacks a competetive coverage outside Moscow.

Moscow Net Additions in May 2003


MTS Steps Over 10 mln Threshold

Russian cellular sector expanded by 1.125 mln new users in April 2003. The growth is mainly fueled by the further proliferation of services on regional markets.

MTS celebrated its 10,000,000 subscriber during Svyaz-Expocomm'03 annual communications exhibition held in Moscow. This milestone (achieved mainly thanks to recent acquisitions and aggressive regional expansion) positions MTS on par with leading European operators.

Top 10 Cellular Operators

Company April 30, 2003 March 31, 2003
Total Moscow Total Moscow
MTS* 10,215,000 3,750,000 9,510,000 3,545,000
Vimpelcom 6,580,000 4,090,000 6,170,000 3,940,000
MegaFon** 3,820,199 403,170 3,635,940 387,706
SMARTS Group 703,900   671,850  
Uralsvyazinform 601,800   551,400  
N.Novgorod Cellular 212,700   201,630  
Tomsk Cellular Communications 135,278   123,630  
Ekaterinburg Cellular 126,700   114,700  
Tatincom 124,868   122,864  
SibChallenge 113,875   102,700  

*including UMC of Ukraine (1.86 mln) and Belarus subscribers (105,000)
** including 6,238 in TT-Mobile (Tajikistan)

Russian Cellular Market Breakdown, April 2003

The chart above includes only Russian subscribers, all CIS networks were excluded from calculations.

Moscow Market

Vimpelcom retains leading positions on Moscow market with approximately 50% market share.

Although MegaFon and Vimpelcom managed to win back ~6% of net additions from MTS in April, MTS' share in new subscriptions remains dominant as the company slowly catches up with Vimpelcom in the Moscow License Area.

MegaFon's Moscow sales are recovering from March problems but the company attracted twice less new subs compared to its January figures.

Moscow Net Additions in April 2003


Steady Growth Continues

Russian cellular market grew by more than 1.1 mln users in March, 2003. Russian mobile companies had 21,115,000 subscribers as of the end of March 2003, which translates into 14.5% penetration of mobile services in the country.

Top 10 Cellular Operators

Company March 31, 2003 February 28, 2003
Total Moscow Total Moscow
MTS* 9,510,000 3,545,000 7,320,000 3,385,000
Vimpelcom 6,170,000 3,940,000 5,847,000 3,846,000
Megafon** 3,635,940 387,706 3,445,000 382,278
SMARTS Group 660,000   619,940  
Uralsvyazinform 551,400   516,600  
Taif-Telcom*** 332,246   313,648  
N.Novgorod Cellular 201,630   191,000  
Tomsk Cellular Communications 123,630   114,311  
Tatincom 122,864   120,584  
Ekaterinburg Cellular 114,700   104,300  

*including UMC of Ukraine (1.82 mln) and Belarus subscribers (65,000)
** including 5,538 in TT-Mobile (Tajikistan)
*** 240,000 active subscribers; Taif-Telcom will be consolidated into MTS starting from end-April 2003 following the recent acquisition.

Russian Cellular Market Breakdown, March 2003

The chart above includes only Russian subscribers, all CIS networks were excluded from calculations.

Moscow Market

The month was successfull for MTS in Moscow while Megafon delivered disappointing results. Vimpelcom also loses its positions in the capital. If the trend persists, MTS may catch up with Vimpelcom in 2-3 months on the Moscow market.

Megafon's weak performance in March may be explained by the lack of direct Moscow numbering capacity that the company rents from other operators. The shortage was terminated in the end in the month. In addition, Megafon launched a new marketing campaign in order to stimulate sales.

Moscow Net Additions in March 2003


2002 Gross Additions of Moscow Operators is Over 5.2 mln

AC&M reports that Moscow mobile operators sold more than 5.2 contracts in 2002. Average monthly sales were slightly over 400,000 until December when Christmas fever resulted in more than 700,000 new contracts sold.

Meanwhile, net additions in Moscow were only 60% of total 2002 sales. This ratio reflects the situation when the major part of growth in Moscow area comes from budget segment of users as saturation approaches.

Sales of Largest Moscow Operators in 2002.

Megafon significantly improved Moscow sales in the end of the year thanks to its new line of "Priem" tariffs. MTS sales skyrocketed with massive ad campaign and introduction of "Jeans" pre-paid brand. Vimpelcom's strong positions were undermined by MTS' aggressive moves in October and November but the company's sales bounced back in December.

2002 results are available as AC&M's Russian Cellular Market Update, December 2002 (PDF file).

If you have questions on Russian cellular market, please do not hesitate to contact us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or by phone +7 495 623-5480.


Total Number of Cellular Users in Russia Exceeds 20 mln

NOTE: Below is the updated version of our report published on March 3. We have reviewed numbers based on the latest information available.

AC&M reports that Russian mobile companies have more than 20 mln subscribers. Total number of Russian cellular users is 20,100,000, which translates into 13.8% penetration of mobile services in the country.

Top 10 Cellular Operators

Company February 28, 2003 January 31, 2003
Total Moscow Total Moscow
MTS* 7,320,000 3,385,000 7,050,000 3,245,000
Vimpelcom 5,850,000 3,850,000 5,620,000 3,800,000
Megafon** 3,445,000 382,278 3,235,750 361,100
SMARTS Group 619,940   582,000  
Uralsvyazinform 516,600   471,600  
Taif-Telcom 313,648   296,375  
N.Novgorod Cellular 191,000   177,000  
Tatincom 120,584   119,081  
Tomsk Cellular Communications 114,311   107,173  
Ekaterinburg Cellular 104,300   85,000  

* including Belarus subscribers (65,000); UMC (Ukraine) will be consolidated starting from March 2003
** including 5,000 in TT-Mobile (Tajikistan)


Alternative Operators Earned More Than 50% of the Industry Revenue

According to the information released by Russian Ministry of Communications, total revenue of the country's telecommunications industry amounted to RUR 270.2 bn (US$ 8.62 bn).

It is important to note that for the first time in the history "alternative" operators outperformed "traditional" ones in terms of revenue. "Traditional" operators mainly include Svyazinvest regional subsidiaries while the rest of operators dubbed as "new" or "alternative". Alternative operators include cellular services providers, ISPs, non-Svyazinvest carriers, etc. According to AC&M estimates, cellular companies alone earned approximately US$ 3.2 bn in 2002.

Russian Telecom Industry Revenue

If you have questions on Russian telecom industry please do not hesitate to contact us at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .