Дата публикации: 08 октября 2023
Автор(ы): E. V. SKLYAROV
Публикатор: Научная библиотека Порталус
Источник: (c) Asia and Africa Today, # 1.31 January 2012 Pages 13-17
Номер публикации: №1696793706



Post-graduate student of MGIMO (U) of the Ministry of Foreign Affairs of Russia

telecommunications Keywords: emerging marketsforeign economic activity of Russian companiesmobile communications

The foreign economic activity of Russian companies is characterized by the fact that they mainly represent the raw materials sector of the economy and operate in the markets of developed countries.

All the more surprising for many was the solid deal of Vimpelcom , one of the largest telecommunications operators in Russia, which in late 2010 - early 2011 for $6 billion. More than a year ago, he acquired Wind Telecom, an Egyptian billionaire of Coptic origin, Naguib Sawiris. This Russian company also took control of Orascom Telecom Holdings (operators in Algeria, Tunisia, Zimbabwe, Burundi, Central African Republic and Namibia, as well as in Bangladesh and Pakistan). Following the merger of its assets (including the Italian firm Wind and the Canadian Globalive Wireless), Vimpelcom became the 6th operator in the world by the number of subscribers.

Vimpelcom's closest rival, Mobile Telesystems (MTS), is actively developing its foreign economic activity, primarily in India.In 2009, it created a joint Russian - Indian enterprise, Shyam Telelink (Sistema on the Russian side).

It seems that the geography of foreign economic activity of Russian high-tech service companies is not accidental: it is in the markets of Asia and Africa that they have certain competitive advantages in comparison, for example, with companies from the leading industrialized countries of the world.


While the overall FT-500 * rating is dominated by companies from developed countries, including the United States (163 companies), there is not a single company from the United States among the largest in the field of mobile telephony, and the number of companies from developing countries and countries with economies in transition already exceeds this indicator in developed countries (9 and 8).

In the first place is China Mobile, in the list there is another Chinese company, one each from Mexico, South Africa, India, Kuwait, Morocco, and two Russian companies-MTS and Vimpelcom-on the 15th and 17th places, respectively (see Table 1). It is noteworthy that 6 companies out of 17 are representatives of BRICS countries.

The growing presence of emerging market companies in the high-tech telecommunications services sector is no coincidence. One of the reasons for this is the highly developed fixed (landline) communication in the leading industrialized countries of the world. In this group of countries, fixed-line revenues still significantly exceed mobile revenues. Perhaps the most notable exception is Japan, where mobile communications account for 70% of telecommunications revenue.

The desire of fixed-line companies to recoup the costs of the created infrastructure leads to a longer product life cycle and to a certain extent hinders the promotion of alternative technologies, even if they are technologically more advanced. On the contrary, the de facto absence of landline communications in Africa has contributed to the rapid development of mobile telecommunications.

A similar situation is observed with the further development of mobile communications, in particular the construction of third-generation networks (3G).

In 2000 alone, telecommunications companies in developed countries spent more than $90 billion. for the purchase of third-generation licenses, partially overestimating the prospects for this generation of networks. While in the UK and Germany, mobile operators paid $100 per person for a 3G license, in Eastern Europe this figure was only $10 per person1.

To a certain extent

FT-500 - 500 largest companies in the world according to the Financial Times (editor's note).

page 13

Table 1

The world's largest mobile telecommunications companies

Place in the industry

Place in the overall ranking 2010

Place in the overall rating 2009

Company name

A country

Market capitalization, mln $

Turnover, mln $

Net profit, mln $

Number of employees (persons)




China Mobile

China (Hong Kong)

192 998,6

66 167,6


145 954




Vodafone Group

Great Britain


58 345,9

4 378,4

79 097






66 734,7

45 680,8

4 846,1

21 831




Deutsche Telekom


59 221,7

92 552,7


259 920






51 517,5

29 090,2

5 195,4

55 627






31 976,7

15 244,3

2 633,0

29 734




MTN Group


28 059,5


1 977,0

16 452






26 680,3

27 452,1


21 048




China Unicom

China (Hong Kong)

26 521,7

22 530,6


216 830




Bharti Airtel


26 382,6

7 272,5

1 530,1

24 538






23 230,4

35 919,4

2 287,5







22 512,4

16 847,6

1 492,9

38 000




Rogers Communications


20 180,9

11 151,1


28 985




Zain Group



8 078,0






Mobile Telesystems



8 390,4

1 580,9

26 343




Itissalat Al Maghrib


16 872,3

3 841,8

1 193,5







16 256,1


1 151,4

36 355

Source: FT Global 500. 2010 - http://www.ft.com

It was the high debt load on 3G networks that contributed to the international success of the Russian company Yota, which was one of the first in the world to pay attention to the promising format of the fourth - generation communication technology-LTE (Long Term Evolution). In addition to modern technology, the breakthrough of Yota was made possible by an innovative marketing strategy: the company earns exclusively on Internet access, refusing to provide traditional voice communication services.2 Starting in June 2009 in Russia, Yota increased the number of customers from zero to 600 thousand people in the first year, and in 2010 it entered the markets of Peru, Nicaragua and Belarus.

The development of telecommunications companies in developing countries is also facilitated by the fact that they restrict the participation of foreign capital in leading telecommunications companies operating on their territory, including through licensing procedures. Telecommunications infrastructure is traditionally considered a strategically important industry for the country's national security. There are similar restrictions in Russia related to both the production of telecommunications equipment and the provision of communication services3.

Often, the decision to grant a license to a mobile operator is based on the political will of the host country's authorities. It is no coincidence that Moscow-friendly countries became the first foreign markets for Russian Yota.

It seems that after a series of revolutions in the Middle East, the "strategic nature" of the telecommunications business and Internet access services will only increase.


Another objective factor that ensured the leading positions of telecommunications companies from emerging economies was the constant increase in effective demand in these countries. Indeed, in the foreseeable future, the size of the BRICS countries ' economies may equal the GDP of the Group of Seven4. In the relatively near future, consumer trends in the world will actually be determined by more numerous residents and developing countries, rather than developed ones.

Already leading Western TNCs are moving away from the traditional concept of glocalization,

page 14

when, in order to achieve the necessary economies of scale, at the first stage a single (global) product is developed for the whole world (in fact, for consumers from developed countries) and then it is adapted according to the residual principle to local markets (markets of developing countries).

At present, this approach does not allow us to take into account the peculiarities of consumer behavior of an increasingly large number of solvent residents of developing countries. As a rule, they need a product( service) whose functional characteristics may be 50% lower than the product (service) for a developed market, but the price should be only 15% of the "base" price 5. This leads to the loss of potential customers and the risk of creating competitive TNCs from developing countries, which may later come to the traditional markets of Western corporations. In fact, success in emerging markets is becoming a necessary element of sustainability in developed markets as well.

Under the current circumstances, the principle of is becoming increasingly widespread, when TNCs in developed countries begin to focus heavily on products developed in developing countries for their markets, and further ensure their global promotion. This process becomes possible with the relatively greater autonomy of local branches of TNCs and the transfer of R & D units to developing countries. This strategy is also followed by the world's leading international telecommunications company, Vodafone, which receives more than 90% of its revenues abroad.6

Faced with the need to address the urgent challenges of living in an environment of extremely limited costs, researchers from developing countries often go much further in the innovation process than their counterparts from developed countries. Emerging markets are gradually becoming centers of innovation across a range of products. Mobile telecommunications is one of them.

First of all, we are talking about the so-called Gandhi innovations, which are associated with Mahatma Gandhi's words about "scientific inventions made for the benefit of each of us." For example, a minute of conversation from the leading Indian operator Bharti Airtel, which ranks 10th in the list of the world's largest telecommunications companies (see Table). 1), costs only 1 US cent, Chinese companies (1st and 9th places) - 2 cents, while American corporations - at least 8 cents 7.

As a rule, most of these innovations, including in the field of mobile telecommunications, are associated with the use of acquired Western technologies using fundamentally different business models. In these models, localization and outsourcing * can significantly reduce transaction costs, while maximizing the supply to emerging and developing markets8.

So, the Indian telecommunications leader Bharti Airtel completely changed the traditional, Western business model based on maintaining a high level of ARPU (Average Revenue per User-average monthly income per subscriber) to attract customers. The company sharply reduced the subscription fee, which was able to attract a large flow of customers, and began to focus on the overall profit indicator. At the same time, it tracks three main ratios: gross revenue and profit; gross revenue and operating expenses (an indicator of operational efficiency); and revenue and capital expenditures (an indicator of fund return).9

To reduce operating costs as much as possible, the Indian company also outsourced a significant part of its functions, linking the cost of their provision to the number of subscribers served. For example, IT services were outsourced to IBM, and the company used a similar scheme to pay for basic telecommunications equipment suppliers such as Nokia and Ericsson. For the development of mobile offers, the Airtel Open Developer Community was developed, which allows you to create applications on this platform, from the sale of which developers receive a part of the profit. At the same time, the operator itself does not spend money on purchasing applications.

To promote its services in rural areas, Bharti Airtel is partnering with Indian Microfinance Institutions (Financial Innovation for Emerging Markets). In order to reduce the cost of capital infrastructure development (construction of basic substations in rural areas), the mobile operator has taken an unprecedented step - cooperation with its competitors (Vodafone and Idea). The cost of creating this infrastructure is shared by companies in the ratio 42%-42%-16%10.

By the way, Yota plans to implement a similar model in Russia by signing an agreement with the "big three" (MTS, Vimpelcom, Megafon) and Rostelecom on the use of the fourth-generation wireless network resources by these four operators, which will be built by the Yota group. In return, get the operators-

* Outsourcing (outsourcing - use of an external source/resource) - transfer for a long time of certain business processes or production functions to service another company specializing in the relevant field (editor's note).

page 15

Table 2

Total number of subscribers and mobile penetration rate in the Russian Federation



Total number of mobile subscribers (SIM card holders) in Russia

220 550 000

Penetration rate in Russia


Total number of mobile subscribers in Moscow

34 658 640

Penetration rate in Moscow


Total number of mobile subscribers in Saint Petersburg

12 979 907

Penetration rate in Saint Petersburg


Total number of mobile subscribers in Russian regions (except Moscow and Saint Petersburg)


Источник: ACM Consulting estimates - http://www.acm-consulting.com/news-and-data/data-downloads/doc download/81-february.html

whether there is an option* to purchase shares of the group in 2014 (20% of Yota shares each). Joint deployment of networks across the vast territory of the Russian Federation will significantly reduce tariffs for consumers 11.

Thanks to its innovative business model, Bharti Airtel manages to be one of the most profitable telecommunications companies in the world in a highly competitive market, with an average monthly revenue per subscriber of only $5.95 (compared to the average level of US mobile operators of $50) (see Table 1).


The Russian Federation inherited from the USSR a relatively undeveloped telecommunications infrastructure, including a weak level of fixed-line penetration. This contributed to the formation of a large mobile telephony market, where Mobile Telesystems (MTS) and Vimpelcom achieved leading positions, and later Megafon joined them.

All the Big Three operators were created with the participation of strategic investors from Europe. Thus, in MTS, from the moment of the company's foundation in 1993 until 2005, first 40% and then 25% of the shares belonged to the German Deutsche Telecom; in Vimpelcom (since its foundation in 1992), a significant stake is still owned by the Norwegian Telenor, in Megafon (since its foundation in 1992). 2002) - Swedish-Finnish Telia Sonera 12.

As the Russian telecommunications industry developed, it shifted from importing capital to exporting it. At the new stage of development of Russian telecommunications operators, foreign strategic investors have become rather an obstacle to successful international operations. MTS managed to buy out Deutsche Telekom's stake, while Vimpelcom and Megafon are forced to coordinate their plans for foreign operations with European strategic investors. For example, Vimpelcom regularly engages in corporate disputes with Telenor regarding its international operations (in Ukraine and Africa).

Analysts have long been talking about the fact that Russian mobile companies will have to leave the country sooner or later. It was clear that with the huge growth rate of the mobile market, subscribers in Russia will quickly run out, and then operators will have to look for new ones abroad.

In 2004, the boom of the Russian mobile market began to fade: the growth was no longer hundreds of percent. In February 2011, about 220 million SIM cards were registered in Russia. Mobile phone penetration in the country as a whole reached 151%, and in the Moscow and St. Petersburg license areas - 205% (see Table 2).

The process of developing the foreign economic activity of Russian operators began back in 2001 with a deal between MTS and the Ministry of Communications of Belarus on the creation of a joint venture "Mobile Telesystems".

As soon as the growth of the Russian mobile market began to subside, Russian operators became noticeably more active in international destinations. In 2004. they spent more than half a billion dollars on foreign acquisitions. In 2005, total expenditures on foreign operations of all Russian investors reached $2.33 billion. Currently, the Big Three (MTS, Vimpelcom, and Megafon) are moving to market development strategies, including entering emerging and emerging markets, as the market becomes saturated.


As a rule, when implementing international projects, telecommunications TNCs try to form regional clusters in order to reduce logistics and management costs, as well as create continuous coverage areas covering several countries13.

* Option - a derivative financial instrument( derivative), a contract that provides the buyer/seller with the right (but not the obligation) to buy an asset (commodity, securities) at a pre-agreed price at a time specified in the contract in the future (editor's note).

page 16

Which regions have become a priority for Russian telecom companies?

In our opinion, in order of priority, these are: the CIS, Asia (South-East and South), Africa, Latin America, and developed countries.

The CIS countries act as a natural springboard for the development of international activities of Russian telecoms. Knowledge of the specifics of doing business in a transition economy, business contacts inherited from the Soviet era, and the absence of language barriers are all elements of the "neighborhood effect"when placing foreign direct investment. 14 Russian telecommunications companies, which began internationalizing their business from neighboring countries, were immediately able to compete successfully there with powerful Western TNCs that were much more experienced in international activities.

Having gained experience in the CIS markets, increased the subscriber base and strengthened financial performance, Russian TNCs have moved on to the offensive in non-CIS countries.

For MTS and Vimpelcom, the active conquest of the post-Soviet economic space began in the first half of the 2000s with the entry into the Ukrainian market, and from the second half of the 2000s they moved to work in Asia and Africa. Megafon is lagging behind, currently it is only registering its presence in the CIS, having entered the markets of Tajikistan and Abkhazia.

In 2005, Vimpelcom established the Altimo company, whose main goal is to purchase foreign telecommunications assets.

The first stage of development of the company's foreign operations was the formation of a cluster in the CIS, it enters the markets of Kazakhstan, Tajikistan, Uzbekistan, Armenia, Georgia and Kyrgyzstan.

A few years later, Vimpelcom started forming a regional cluster in Southeast Asia. In 2008, the company acquired telecom operator Sotelco LTD (Cambodia) and created a joint venture Gtel Mobile (Vietnam). In June 2009, the Gtel Mobile network was launched commercially in Vietnam. In September 2009, Vimpelcom signed an agreement to acquire a 78% stake in Millicom Lao Co, a mobile operator in Laos. In 2010-2011, the already mentioned merger of Vimpelcom's assets and Wind Telecom took place.

MTS ' activity in foreign markets began in 2002, when the company managed to enter the Belarusian market, and a year later it bought UMC (Ukraine). Subsequently, MTS acquired assets in Uzbekistan, Turkmenistan, and Armenia. Thus, a cluster was formed in the CIS countries. In October 2008, MTS Group and Vodafone, a leading international mobile operator, announced the conclusion of an exclusive strategic non-equity partnership (strategic alliance) aimed at expanding the marketing and technological capabilities of both companies in the CIS countries.

In February 2009, the MTS brand entered the Indian market: Shyam Telelink, a subsidiary of Sistema, was able to use the MTS brand in India (South Asia).

The aforementioned entry of Yota into the markets of Peru and Nicaragua, as well as the growing foreign economic activity of Qiwi, which is already present in the markets of Argentina, Colombia, Panama and is planning to enter the Brazilian market15, allow us to conclude that Latin America is likely to become the next region for foreign activities of Russian telecommunications TNCs.

* * *

In general, it can be concluded that the business model of Russian telecommunications companies (relatively low ARPU, high subscriber base growth rates), skills in working in an undeveloped infrastructure (including outdated or virtually non-existent fixed telecommunications networks) are important competitive advantages of Russian companies when working in the Asian and African markets.

Russians come to places where the first mobile networks have already been created, but the level of mobile penetration is still far from saturation.

The markets of Asia and Africa are becoming an important and promising area of international activity for the domestic telecommunications business.

Efanov A. 1 Tendentsii razvitiya telekommunikatsionnykh TNK [Trends in the development of telecommunications TNCs].

2 From Russia with Bandwidth. A Russian Start-up Shows how 4G Wireless Might Work // The Economist, 19.08.2010.

3 Federal Law No. 57-FZ of 29.04.2008 "On the procedure for Making Foreign Investments in Business Entities of Strategic Importance for Ensuring National Defense and State Security".

4 The world after the crisis. The year is 2025. Report of the National Intelligence Council of the USA, Moscow, Europe, 2011, p. 188.

Immelt J., Govindarajan V., and Trimble Ch. 5 How GE Is Disrupting Itself // Harvard Business Review, October 2009.

Efremov A. A. 6 Formy mezhdunarodnoi kooperatsii na mirovom rynke uslug mobil'noi svyazi [6 Forms of international cooperation in the global market of mobile communication services].

Prahalad C.K., Mashelkar R.A. 7 Innovations' Holy Grail // Harvard Business Review, July-August 2010.

Eyring MJ., Johnson M.W., Nair H. 8 New Business Models in Emerging Markets // Harvard Business Review, January-February 2011.

Prahalad C.K., Mashelkar R.A. 9 Op. cit.

10 Ibidem.

Aliev A. Yota 11 broad access / / Expert Online, 3.03.2011 - http://expert.ru/2011/03/3/yota-shirokogo-dostupa

Efremov A. A. 12 Decree. Op.

13 Ibid.

Kuznetsov A. 14 Direct foreign investments: "the Neighborhood effect" / / ME and MO, 2008, No. 9.

Napalkova A. 15 Qiwi will collect small money around the world / / Expert, 2011, N 3.

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