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20 Feb, 2008 04:23

New telecoms player to challenge Svyazinvest in regions

As Russia's regions see the fastest economic growth in the country, a new telecommunications company, Effortel, is hoping to become Russia's first countrywide operator.

The Russian telecommunications market is one of the fastest-growing consumer sectors.

In 2006, the volume of Russia’s telecom market amounted to $US 30 billion. Of that, just over one third was attributed to fixed lines.

“Fixed-line penetration in Russia is only 71%, which is far too low for a country like Russia.  Basically it means that the potential for growth is enormous and therefore we are looking for very strong growth in telecoms in the near future. There are plenty of players on this market now.  Basically the thing about Russia is that Moscow is a pretty developed market now and everyone is talking about coming to regions,” observed Sergey Vasin, telecommunications analyst at IFC Metropol .

Russia's largest telecommunications holding company, Svyazinvest, has the bulk of the country covered.

It is a holding comprised of seven regional operators, the national long-distance and international operator Rostelecom, and a development division. 

For the first time since it was formed more than a decade ago, Svyazinvest faces competition from a new company, Effortel Russia, which is aiming to create the country’s first federal-scale multi-service operator.

They are pushing a “triple play” strategy, which would offer telephone, television, and high-speed internet services to subscribers and would enable them to compete with other established companies.

“Our task is to reach markets in Russian cities and grab onto a substantial part of both business and individual users to enter the battle to create the first federal telecom operator brand. Russian regions hold one of the most important places in our development plans.  We specifically want to become a national telecom company and therefore we are focusing not only on Russia's two major cities, but we're looking to enter the markets of 40 cities across the country,” explained  Mikhail Susov, General Director of Effortel Russia.