Popularity of non-voice services in Russia

2005-09-12

Around one third of Russian mobile users spend less then €6 per month on mobile services. Nevertheless, they are increasingly using non-voice services. Although for most of the users this means "basic SMS", other value-added services offered by mobile operators are also developing in Russia.

One of the visible trends which may be observed on the mobile market in the whole of Central and Eastern Europe is an increasing share of revenues from data (non-voice) services as a proportion of the total revenues of mobile operators. In 2001 revenues from such services accounted for some 8% of the aggregate revenues of mobile operators in the region; over the last three years this figure has grown steadily to 13% in 2004. The trend can be observed in all CEE countries. Last year, the share of non-voice services as a proportion of mobile revenues ranged from 12% in Russia and 13% in Hungary and Poland to as much as 17% in the Czech Republic.



We estimate that in total, non-voice services provided by mobile telephony in CEE in 2004 were worth around €2bn, which meant growth of 57% in comparison with 2003. In 2004 such services accounted for some 5% of the total telecommunications market in CEE. Most of the non-voice revenues of mobile operators in CEE are accounted for by basic SMS services. In 2004 the share of SMS as a proportion of total mobile non-voice revenues in CEE was 82%.
Russia accounted for the largest proportion of the non-voice services market: 38%. This represented some €800m. Poland came second (31%), followed by the Czech Republic (18%) and Hungary (13%). Russia is also the most dynamically expanding mobile market. The number of mobile phone users has already crossed the 100 million threshold, and mobile density exceeds 60%.



A recent poll conducted by Romir Monitoring, a Russian market research company, shows that more than 70% of Russians spend no more than €9 on mobile services. Around one third spend up to €6. Every fifth Russian mobile phone user spends €9-14 per month.
It is not surprising that mobile spending depends on the place of residence. Every second respondent in a rural area does not spend more than €6 per month on mobile communication. Monthly expenses of €6-9 are typical for respondents from towns with populations of fewer than 100,000 people. In major cities, such as Moscow and St. Petersburg, the share of mobile users with very substantial expenses is 24%.
The share of those who spend more than €14 per month for mobile communication is larger in this age group (18%) than on an average in the sample. On average in Russia only 16% of mobile phone users spend more than €14 per month.



The Romir Monitoring survey also shows that the popularity of mobile services other than that of voice is growing in Russia. Around two-thirds of mobile phone users in Russia state that they send SMS messages. According to the poll, one in five use the SMS premium system to access ring tones and melodies and some 17% use the system to acquire images. Another 15% of the respondents declared that they use GPRS to access the internet. One in ten obtain weather forecast messages. Fewer than 10% of the respondents say that they use additional services such as WAP-based access to the internet, SMS games and other premium services. It is also worth mentioning, however, that around one quarter of mobile users in Russia still say that they do not use mobile services other than voice at all.
The survey revealed that the younger the respondents the more frequently they use different additional services; for example, SMS is used by 86% of younger respondents aged 18-24 and by 34% of respondents of more than sixty years of age. In addition, only 8% of young respondents do not use any additional services.
It is also of interest that, in general, in Russia additional mobile services are used more often by men than by women. According to the poll, 25% of men and only 17% of women accessed melodies via SMS, while 20% of men and 14% of women obtain images via a mobile. The relevant figures for GPRS-based internet access were 19% and 12%. Basic SMS is an exception - with regard to this service, the figure for women is slightly higher than that for - 69% and 66% respectively.
According to the results of the research, services such as SMS and internet access are used more often by highly educated respondents, while participants in the survey who went through only primary education prefer entertaining services, such as picture/ringtone downloading and SMS games. At the same time, every second primary school-educated respondent does not use any non-voice services.

Pawel Olszynka
pawel.olszynka@pmrpublications.com

Methodology note:
The survey canvassed 1,600 respondents aged 18+ from more than 100 Russian cities and towns in June 2005. The sample is representative of the adult population of Russia.