Maravedis WiMAX Forecast Ranks the Russian Federation among the Top Five Largest Wireless Broadband Opportunities in the World

Maravedis WiMAX Forecast Ranks WiMAX in Russian Federation

Maravedis WiMAX Forecast Ranks the Russian Federation Among the Top Five Largest Wireless Broadband Opportunities in the World

Leading wireless research firm, Maravedis, releases new market study titled "Russian Federation Broadband and WiMAX Market Analysis and Forecasts 2006-2010" to provide an in-depth review of current regulatory and overall wireless market trends in Russia

MONTREAL, Canada, and MOSCOW, Russian Federation, May 23, 2006 – Maravedis Research (http://www.maravedis-bwa.com), a leading wireless broadband access research firm, announced a new research report entitled the “Russian Federation Broadband Wireless and WiMAX Market Analysis and Forecast 2006-2010,” which details the golden opportunities now present within the Russian Federation for BWA and WiMAX wireless products and services.

The new 100-page report, the second of a series that includes reports on Brazil and India, provides an in-depth review of the broadband wireless and WiMAX markets and regulatory activity taking place in Russia.

The Russian economy is flourishing and demand is quickly outpacing the supply of the telecommunications services provided by legacy wired telecommunication infrastructure built during the communist era. For example, more then 70% of Russia households do not have access to fixed wired telephone services. Instead, customers have flocked to cellular phone carriers, which have built a tremendous infrastructure of cellular towers to provide service to more 130 million customers or 90% of the Russian population.

The same trend is predicted for broadband wireless Internet access services, such as WiMAX, that will provide high-speed data services over a wireless data infrastructure. Small- to medium-sized businesses realize the potential of websites and doing business online via the Internet in order to reach the worldwide economy. Since 75% of Russian households can not get basic dial-up Internet access, wireless Internet service providers (WISPs) are expected to break open the large pent up demand for broadband Internet connections.

“There is huge potential for broadband wireless Internet and voice-over-IP services in Russia because there are still more than 40,000-50,000 towns and villages with no basic communications services,” explained Maravedis’ Russian and Ukraine Senior Analyst, Artur Mironenko. “And, as the economy keeps improving, not only do customers want high-speed connections, but in many areas they now have the household budgets to pay for high-speed Internet access.”

“Several wireless Internet service providers, such as Art Com, Enforta and Tascom, have already launched service in Russia and are enjoying early successes and heavy demand from consumers and businesses,” said Adlane Fellah, senior analyst with Maravedis Research. “Our wireless forecast for Russian broadband wireless access shows the vast potential for this marketplace and provides a valuable analysis of existing wireless operators.”

Maravedis predicts a consolidation among the current 200 BWA service providers active in the country. In fact, the authors interviewed and profiled the Top 10 service providers in Russia and concluded that the most active players will be companies with deep pockets that belong to one of three major holdings in Russia, namely Alfa, Sistema and Telekom Invest which control both fixed and mobile service providers. Others such as Enforta also benefit from a sound investment capacity. Vendors and financiers need to be aware of “noise makers” who put press releases with ambitious plans but after analysis appear as just “smoke and mirrors.”

“The most promising regions (russian word for region is oblasts) for the development of BWA/WiMAX networks are Moscow city, Saint Petersburg, Samara oblast, Sverdlovsk oblast, Rostov oblast, Tatarstan republic, Krasnodar krai, Tyumen oblast, Chelyabinsk oblast and Bashkortostan republic. The center region will concentrate one-third of total subscribers,” added Mironenko.

“However, shortage of spectrum and very stringent regulation for equipment and licensing are serious obstacles for massive adoption of broadband wireless and WiMAX in Russia. For WiMAX to prosper in Russia, frequency bands in the 2 GHz range (2.3-2.4 and/or 2.5-2.7GHz) must be made available to commercial operators. That will require current analog broadcasters to digitalize their networks which will take a long time,” Mironenko continued.

Maravedis’ latest research also reveals that Russia remains a very price sensitive market. Demand for broadband services is exploding, but both service providers and residential end-users demand very low cost CPE (in the $100 range) before they will fully adopt WiMAX. So far, the demand for broadband wireless services has been mainly driven by high-end corporate and residential as well as government users.

The Russian Federation Broadband Wireless and WiMAX Market Analysis and Forecast 2006-2010 is a must read for companies wanting to enter the Russian marketplace and provides a good roadmap that will help various players maneuver around obstacles and find the real opportunities to make money in this region. A free copy of the table of contents can be downloaded at: www.maravedis-bwa.com

Maravedis BWA / WiMAX Research Reports and License Database Updates:

Maravedis produces a wide variety of broadband wireless research reports. The company also maintains a worldwide database of license holders, government regulations and spectrum band plans. More information on how to purchase reports or subscribe to the ClearSpectrum License Database, please visit: http://www.maravedis-bwa.com/how-to-order.html

Research Report/Database Country Date

Worldwide List of BWA/WiMAX License Holders Worldwide 1/2005

BWA/WiMAX Worldwide Market Analysis & Forecast Worldwide 3/2005

North America 700MHz Regulatory & Market Analysis USA, Canada 10/2005

BRS, EBS and WCS Regulatory & Licensing Analysis USA 12/2005

BWA/WiMAX Brazil Market Analysis & Forecast Brazil 4/2006

ClearSpectrum BWA/WiMAX License Database Update Middle East/Africa 5/2006

BWA/WiMAX Russia Market Analysis & Forecast Russian Federation 5/2006

BWA/WiMAX Worldwide Market Analysis & Forecast Worldwide 6/2006

BWA/WiMAX India Market Analysis & Forecast India 7/2006

BWA/WiMAX China Market Analysis & Forecast China TBD

Who should buy this research:

Wireless Service Providers seeking to understand licensing environments in the Russian Federation
Wireless Equipment Vendors seeking to understand international technical regulations for product development and business development opportunities in Russia
Wireless Regulators seeking to establish benchmarks for their own spectrum allocation strategies
Wireless Financiers seeking to understand the revenue potential of WiMAX service providers in Russia
Wireless Consultants who need a better understanding of WiMAX business opportunities in Russia

The report covers the following information:

Structure of the Russian Broadband Wireless Market Structure
The report provides a detailed list of the incumbent carriers, mobile wireless companies, BWA/WiMAX players as well as a list of holding companies, investment firms and utility companies that are providing or trialing wireless services.

Background on the Growing Russian Economy
The Russian economy has grown at 6-7% annually for the past seven years and is quickly shifting to a market driven economy. Russian businesses are eager to use new technologies and services. The whole economic structure is slowly changing from the prevalence of large conglomerates to an economy of small- to medium-sized businesses.

Broadband Market Drivers
More than 40,000 towns are without any wired communication facilities, and wireless networks represent an efficient solution for providing bundled services in these neglected areas. Further, modern communications are required by oil, gas and other utilities with substantial funds available for capital investment.

BWA/WiMAX Regulation
The Russian telecom regulator is the Ministry for Communications and Information (MCI), while the State Radio Frequency Commission (SRFC) is in charge of spectrum management and radio regulation. Authorities are trying to find a compromise between satisfying market demand and sharing spectrum among different user segments

Broadband Wireless Access Market Overview
There are more than 200 companies providing broadband wireless Internet access in the Russian market. There are no national networks, but that is expected to change over the next three years as larger players such as Enforta, begin to acquire assets in order to reach critical mass.

Top 10 BWA / WiMAX Wireless Internet Service Providers (WISPs)
The report profiles the top 10 WISPs in Russia and provides information on what equipment and spectrum is being utilized, service pricing models and market penetration levels. The most promising regions (regions are called oblasts) for the development of BWA/WiMAX networks are Moscow, Saint Petersburg, Samara oblast, Sverdlovsk oblast, Rostov oblast, Tatarstan republic, Krasnodar krai, Tyumen oblast, Chelyabinsk oblast and Bashkortostan republic.

Operator Challenges in Russia
Russian operators face some important issues regarding spectrum available and approved equipment mandates. On the regulatory front, many changes are being considered such as how much additional spectrum should be allocated as well what type of bidding process should be followed to ensure a competitive marketplace.

There are of course the “noise makers” such as NUTel Telecom project (GlobeTel project) who put press releases with ambitious plans but after analysis appear as just “smoke and mirrors”. Vendors and financiers need to be aware of this.

Broadband Wireless Access Russian Market Forecasts
It is clear that the speed of BWA will vary greatly among regions, as determined by economic structure, growth rate, standard of living and distribution of wealth. The report covers the most attractive markets for BWA as well as predicted growth rates.

Overall, the total accumulated equipment market size for BWA/WiMAX in Russia will represent a lucrative US$360 million by 2010 from $27 million in 2005, which makes Russia an important market for BWA/WiMAX vendors for the years to come.

There will be more than 867,000 Broadband Wireless Access (BWA) subscribers by 2010, but only one-third of these customers will be subscribed to WiMAX-based services. Maravedis predicts that approximately 60% of those accumulated WiMAX subscribers will be using 802.16 e equipment and will be dominated by residential users, while 802.16-2004 will continue to be driven by large and SME customers.

About the Author
Adlane Fellah, CEO and founder of Maravedis Inc., is a world-leader in market research and analysis, specializing in the WiMAX and broadband wireless industries. He is a leading industry analyst who has authored numerous landmark reports on WiMAX, broadband wireless and Voice over IP. He is a frequent speaker at leading wireless broadband tradeshows and serves as a subject matter expert for media interviews and panel board discussions. Members of the media can contact Mr. Fellah at (786)347-5580 or email at afellah@maravedis-bwa.com.

About Maravedis Research
Maravedis is a leading research and analysis firm focusing on Broadband Wireless technologies including WiMAX, 802.20, TD-CDMA and Wireless Local Loop Systems. Maravedis has established itself over the years as the most credible and reliable resource for market intelligence in the broadband wireless industry. Maravedis works with equipment vendors, service providers, regulators and the investment community to produce a sound market analysis based on hard primary data and on in-depth understanding of technology, market and regulation trends. For more information, please visit www.maravedis-bwa.com.

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