Russia's "Big Three" Mobile Operators Report Data-Traffic Surge After Moscow 3G Launches

Russia's three leading mobile operators and only 3G licensees—Mobile TeleSystems (MTS), VimpelCom, and MegaFon—have each reported significant increases in their mobile data-traffic levels since launching outdoor 3G services in Moscow, according to a widely cited report in Vedomosti. MTS has reported that data traffic was up two to three times on parts of the network since the launch of 3G on 29 December, according to company spokeswoman Irina Osadchaya. VimpelCom has reported that data traffic was up 2.5 to 3.0 times since its 3G launch on 28 December, according to company spokeswoman Kseniya Korneeva. MegaFon Commercial Director Oleg Klochko has indicated that the company's internet traffic more than doubled during the fourth quarter, with 3G traffic accounting for around 20% of all data transfers.

Outlook and Implications

Increased Data Traffic to Be Reflected in ARPU Figures: Although the data-traffic growth figures apply only to Moscow subscribers, this equates to around 20% of the operators' total subscriber bases, with, for example, MTS reporting in November 2009 that of its 68.78 million Russian subscribers, 13.57 million were in Moscow and the Moscow Region. MTS had reported that of total third-quarter 2009 blended monthly ARPU of US$8.2, around US$1.5 came from data services, and the increased data-traffic levels will inevitably be reflected in ARPU figures, although none has yet been released.

Operators Vindicated in Moscow 3G Push: The surge in data-traffic levels will be observed with some satisfaction by the three mobile operators, which had sought for some time to gain permission for 3G provision in Moscow. As the economic hub of the country, the capital city is home to higher end customers who would therefore be more liberal users of the more expensive value-added services facilitated by 3G. That the operators had sought to implement 3G is therefore understandable, but for several months 3G provision in the capital had not been possible because of the use of relevant spectrum by the military, and Moscow eventually became the last city in Russia in which outdoor 3G provision was allowed (see Russia: 15 December 2009: Further Progress for Russia's Big Three on Moscow 3G Issue). However, the hike in traffic-usage levels appears to justify the sentiment of these operators.