Russians getting used to the internet
2006-05-12
Internet penetration in Russia remains among the lowest in the Central and Eastern European region. Nevertheless, over the last two years the proportion of Russians who access the internet on a regular basis has been increasing steadily.
The Russian market for internet services provision (ISP) is definitely the largest in the Central and Eastern European (CEE) region. According to our estimates its value might have amounted to as much as €700m in 2005, which means it jumped by some 40% in comparison with 2004. The number of internet users, i.e. people accessing the web at least once a month, is also the highest in the region. By our estimate, the figure stood at around 25 million at the end of 2005. These two features, as well as another one, the fact that the Russian internet market has a significant potential for further growth, are consequences mainly of the country’s size and population.
e – estimate
Note: At least once a month; penetration is for the 15+ age bracket.
Source: Fessel-GfK, 2006; PMR Publications, 2006
In fact, one of the main current characteristics of the Russian ISP market is that it is still strongly underdeveloped and there are huge differences in internet density between central and other parts of Russia. We estimate that at the end of 2005, internet penetration for the whole country totalled just some 18% of the population aged 15+.
Note: At least once a month; penetration is for the adult population.
Source: Romir Monitoring, 2006
However, as mentioned above, the country is far from homogeneity. According to a series of surveys carried out in 2005 and in 2006 by Romir Monitoring, a market research company, internet penetration in Russia ranges from some 6-7% in the Urals and the Far East to approximately 30% in the Central district (including Moscow).
Another aspect of the diversity of the internet market is the uneven internet density levels when comparing urban and rural areas. According to Romir Monitoring, in the largest cities of above one million inhabitants, every fourth adult person is an internet user. Conversely, in rural areas this percentage is closer to just 10%. Interestingly, a real boost of internet popularity has also been seen recently in cities with less than one million inhabitants.
Note: At least once a month; penetration is for the adult population.
Source: Romir Monitoring, 2006
It is also worth noting that over the last year or so internet density in the largest cities has risen by six percentage points, while that in rural areas has remained almost unchanged. This disparity is a result, to a large extent, not only of the high prices and weak consumer demand for internet services, but also the poor state of the telecommunications infrastructure in Russia, especially in rural areas and small towns. This is confirmed also by Russian telecommunications operators, which at the first stage invest chiefly in the upgrading of their metropolitan networks.
Among the positive trends visible on the Russian internet market is a significant uptake of broadband in the country, however, also mainly in the largest cities. We estimate that at the end of 2005 there were around 1.5 million broadband subscribers in Russia, which means the number doubled in comparison with 2004.
Source: Romir Monitoring, 2006
Another positive trend which is worth mentioning is the steady improvement in the frequency of internet usage in Russia. Russian consumers are gradually changing their attitude towards the internet and an increasing proportion of them access the web very often. According to Romir Monitoring the percentage of Russians who access the internet every day or almost every day increased from 3% at the end of Q1 2003 to 7% in Q1 2006. Over the same period the percentage of those who use the internet at least once a week more than doubled from 8% to 17%.
With regard to other interesting features of the Russian internet market it should be mentioned that the internet density is the highest among students (61% as of Q1 2006), in the 18-24 age group (35%) and among consumers with monthly income exceeding RUR 5,000 (34%).
Pawel Olszynka
Methodology note:
The survey of Romir Monitoring was carried out on a quarterly basis between Q1 2003 and Q1 2006 in Russia. A total of 1,600 people aged 18+ were canvassed for each wave of the survey. Face-to-face interview method was used.
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