News
Operator pessimistic about the next two years as competition heats up.
Beeline this week issued a pessimistic forecast for Russia’s mobile market in 2016, as competition between the country’s operators heats up.
In its annual market report, published on Monday, the Vimpelcom-owned operator said 2015 was the first year of declining revenue growth in Russia, caused by various factors, not least of all the cannibalisation of traditional mobile services by over-the-top (OTT) players, particularly WhatsApp.
Beeline said mobile network expansion and the depreciation of the rouble has squeezed margins, while increasing competition forced operators to constantly review their price plans.
Russia is home to four major mobile operators: MTS, MegaFon, Beeline and Tele2, the last of which has embarked on an aggressive rollout plan following its 2014 merger with Rostelecom. According to Beeline, SIM-card penetration stands at nearly 190%.
In 2015, Beeline said the big four saw combined service revenue fall 0.1%, compared to growth of 2% in 2014.
Beeline said it expects this trend to continue for the next one to two years, with competition ramping up further in 2016 as players copy each other’s initiatives in a bid to steal market share.
The "Russian market has moved into a phase of stagnation," Beeline said, predicting that it will contract by 0.3% this year.
