The Russian market for wireless telecommunications has been volatile in the last five-year period, with growth rates ranging from negative 10.5 percent to 19.8 percent.

The market experienced feeble growth over the period, which is expected to accelerate slightly over the next four-to-five years.

The wireless telecommunications market in Russia recorded total revenues of USD15.0 billion in 2019, representing an average annual growth rate (CAGR) of 0.6 percent between 2015 and 2019.

The Russian market is characterized by a combination of factors. First, the turbulent macroeconomic environment hampered the market in 2015-16, with falling incomes exacerbating the situation, putting downward pressure on prices and forcing leading companies to accept lower margins. Consequently, the market declined by 10.5 percent in 2016. Saturation of voice services on the market has also led to a significant decline in revenue in this segment, while internet services have been able to grow in recent years. The market rebounded in 2017 with 19.8-percent growth, as providers began to capitalize on the rise of mobile internet.

With a CAGR of 0.4 percent between 2015 and 2019, the market volume increased to a total of 256.6 million subscribers in 2019. By the end of 2024, the market volume is expected to grow to 278.3 million subscribers, corresponding to a CAGR of 1.6 percent for the period from 2019 to 2020.

Cost-cutting largely drives consumption growth, owing to intense competition between the leading players. However, the mobile market is saturated and needs to boost subscriptions if user numbers are to increase. Given the already low margins with which most companies operate, it will be difficult to increase the number of users. Hence, a low rate of growth is expected.

Voice had the highest volume in the Russian wireless telecommunications market in 2019, with a total of 8.8 million subscribers, representing 58.6 percent of the total market volume, compared to 5.2 million subscribers in 2019, representing 34.4 percent of the total market.

Although voice is the largest segment, the data segment increasingly drives market value. The data segment grew strongly in 2015-2019, while revenue in the voice segment declined moderately.

In particular, the introduction of faster 4G networks, coupled with the rapid adoption of smartphones and the increasing affordability of data services, has led to increased mobile internet engagement, which is boosting data usage.

The increasing use of VoIP services and IP messaging has absorbed revenue from the voice segment, while call charges and termination rates have declined due to falling operating costs and saturated demand.

Market development is expected to accelerate, with an expected CAGR of 1.2 percent for the five-year period from 2019 to 2024, which should propel the market to a value of USD16.0 billion by the end of 2024.

The proliferation of COVID-19 makes it difficult to predict market development in the coming years. In light of the fact that most people are tied to long-term contracts, it is unlikely that the market will experience a dramatic contraction. However, 5G infrastructure plans are likely to be held back due to the pandemic that could hit the industry.