Market Overview

Global market1

The aggregate global revenue of mobile operators totalled US$ 1.08 trillion in 2021 and is forecast to climb to US$ 1.16 trillion by 2025. At the same time, capital expenditures in 2022–2025 are expected to reach US$ 620 billion, with 5G network development accounting for 85% of the total. The mobile industry’s contribution to global GDP in 2021 is estimated at 5%, or US$ 4.5 trillion, with 12 million people engaged directly in this industry.

In 2021, the global mobile subscriber base reached 8.3 billion SIM cards, excluding IoT connections, while the number of unique mobile data users grew to 5.3 billion. By 2025, the number of mobile users will grow by 500 million to 8.8 billion SIM cards, while the number of unique mobile data users will reach 5.7 billion.

By 2021, 5G was available in as many as 70 countries.

4G/LTE remained the most popular mobile format in 2021 accounting for 58% of all connections, excluding IoT. 4G penetration is expected to gradually decline as devices migrate to 5G, with its share surging from 8% (1 billion devices) in 2021 to 25% (2 billion devices) in 2025. The number of IoT connections globally has reached 15.1 billion and is projected to rise to 23.3 billion in 2025.

According to Ericsson2, mobile data traffic was up 44% in 2021 to 84 EB per3 month. The company estimates that monthly mobile data traffic per subscriber will increase by almost 4.5 times by 2027 to 288 EB per month. The growth will be largely attributed to the increasing number of digital subscribers and the availability of high-speed mobile networks, primarily 5G, which will account for more than 60% of the total traffic.

Global mobile data traffic, EB per month2

Global mobile data traffic, EB per month
5.3
billion subscribers
8.3
billion devices
4.2
billion unique users

Unique mobile subscribers, billion subscribers

Penetration rate 5 2021 5.3 5.7 70% 2 67% 2 % Penetration rate 5 2025F 2021 5.3 5.7 70% 2 67% 2 %

Connected SIM cards, billion devices4

Connected SIM cards, billion devices

Mobile data, billion users

Penetration rate 5 2021 4.2 5.0 60% 4 53% 2 % Penetration rate 5 2025F 2021 4.2 5.0 60% 2 53% 2 %
  1. All data in the Global Market section are based on The Mobile Economy 2022 report by GSMA unless otherwise indicated.
  2. According to Ericsson Mobility Report: Q4 2021 Update.
  3. Exabyte (EB) is 230 (about 1 billion) GB.
  4. Excluding IoT connections.
  5. Penetration implies the share of the global population covered.

Russian telecommunications market1

In 2021, the telecom market size was RUB 1.8 trillion, up 3.2%, which is the highest rate in several years. The growth was mainly driven by the recovery in the mobile market after a significant slowdown amid the pandemic in 2020.
At the same time, segments such as fixed broadband access and pay TV trended downward after a wave of connections during lockdowns, while tariff increases were local.

Mobile services

In 2021, the number of mobile subscribers in Russia increased by 3.3% to 259 million2, almost recovering to the 2019 level of 260 million. Penetration came in at 178%. In absolute terms, the subscriber base rose by 8 million, which is the highest growth over the last five years. This was due to easing lockdown measures, which provided an influx of visitors to stores and partially brought back guest workers, who historically make up a substantial share of Russian operators’ customers.

Operators’ mobile revenues increased by 4.4% in 2021, up from 0.9% in 2020. In addition to the growing subscriber base, they were driven by rising roaming revenues as border restrictions were lifted and tourist flows began to rebound. Another factor was a significant increase in the revenue from value-added services in the B2B segment. Mobile services remain the principal source of revenue for the Russian telecommunications industry: this segment’s share is estimated at about 60% of the total revenue for 2021. The Russian mobile market has four major operators: MegaFon, MTS, VEON, and Tele2.

RUB 1.8 trillion
Russian telecom market in 2021

Russian telecom market in 2017–2021,
Revenue, RUB billion

2021 1 2019 2020 Growth rate, % y-o-y 2018 2017 1,804 ↑ 3.2 1,641 1,694 1,739 1,747 ↑ 0.5 ↑ 2.6 ↑ 3.3 ↑ 2.7

M2M and IoT

According to preliminary estimates by J’son & Partners Consulting, the Russian M2M and IoT market size reached RUB 93.5 billion in 2021, with IoT/M2M connected devices up 16% to 29.6 million. The main growth driver was the ERAGLONASS technology deployed across the transport industry, including the introduction of a state automated automotive emergency response system, the technology’s use in transporting passengers and dangerous goods, installation of telematic systems by manufacturers of mass-produced cars, and many other applications.

↑ 16.0%
29.6
million connected devices

Fixed-line services

In 2021, the fixed-line market declined by 8.1% to RUB 87.9 billion, with the subscriber base shrinking by 8.5% to 19.6 million, mainly due to the spreading use of messengers and mobile services. Revenues in the B2C segment were falling at a faster rate, while the service penetration decreased by 3 p.p. to 24%.

↓ 8.1%
RUB 87.9 billion
Fixed-line market

Broadband internet access

In 2021, broadband penetration exceeded 61% in the B2C segment.
The subscriber base was up 0.8% to 34.8 million (2020: 2.4%). The growth was driven mostly by the spread of converged products offered by operators, but slowed down due to high market saturation.

The mass market size increased to RUB 149.7 billion in 2021, but showed lower growth rates at 1.0% compared to 3.4% in 2020, as ARPU declined from RUB 362 to RUB 360.The decline was due to increased penetration of converged tariff plans among the subscribers of major federal operators.

In addition, the market did not see any massive rise in home broadband tariffs in 2021. In the Russian B2B segment, the number of broadband subscribers grew by 1.8% to 1.87 million at the end of 2021, mainly due to the completed third phase of the nationwide project to connect social infrastructure facilities to the internet and the recovery of small and medium-sized enterprises after the pandemic-driven decline in 2020.

Revenues in the B2B segment increased by 13.7% to RUB 65.3 billion in 2021. Such a strong growth in a saturated market was enabled through integration projects under programmes for social infrastructure facilities through the commissioning of planned facilities, which are the main cost items.

↑ 0.8%
34.8
million
broadband subscriber base
↑ 13.7%
RUB 65.3 billion
Revenues in the B2B segment

Pay-TV

In 2021, the pay-TV subscriber base was up 0.6% to 46.5 million, while the service penetration remained stable at 82.5%. Revenues from the service increased to RUB 106.2 billion, up only 1.5%, which is the lowest in the history of the Russian pay-TV market.

This slowdown was due to the combined effect of the shrinking number of new subscribers and the stabilising ARPU. The latter rose only by RUB 1 to RUB 191 over the past year as operators were very cautious to raise tariffs in order to avoid stronger churn. In addition, the service revenue was held back by the growing penetration of bundled tariffs. To improve ARPU, operators increased their focus on developing video-on-demand services, expanding their own libraries and concluding partnership agreements with online movie and video streaming services, such as ivi, Kinopoisk, Okko, Megogo, and others.

IPTV remains the key growing technology with gross additions at 5.4%.
The satellite TV segment continued stagnating – the number of users increased by only 0.2%. The cable TV subscriber base declined by 1.9%.

↑ 0.6%
46.5
million
pay-TV subscriber base

The government’s measures to support the industry in 2022

In March 2022, responding to new sanctions against Russia imposed by the US, EU, Japan, and several other countries, the Russian Government approved a series of measures to support the telecommunications industry, prepared by the Russian Ministry of Digital Development, Communications and Mass Media together with market participants. The key measures were:

  • one-year moratorium on the enforcement of the Yarovaya law for Russian telecom operators, which obliges them to store all user traffic on their capacities and increase the amount of stored data by 15% annually
  • temporary exemption from the requirements of the State Commission on Radio Frequencies for operators to launch LTE in small communities and on federal highways
  • permit to proportionally index tariffs to inflation and reduced risk of claims by anti-trust authorities
  • reduction of the income tax rate from 20% to 3% by the end of 2024
  • preferential loans at rates up to 3%.

Also in March 2022, the Ministry of Digital Development, Communications and Mass Media recommended that telecom operators discontinue unlimited mobile traffic and introduce restrictions on unlimited tariffs.

The government's measures to support the industry in 2022
  1. All data in the Russian Telecommunications Market section are based on 2021 TMT Consulting reports published unless otherwise indicated.
  2. Active SIM cards.