Once declared as one of the world’s superpowers, Russia has ricocheted and has become one of the booming markets in the world and is become a cynosure for foreign investment. The major influx of foreign investment in Russia is in the services sector. This is evident from the fact that out of the total foreign investment made in Russia, as many as 57.85 of it are made in the services sector. One of the major chunks of this investment goes in the communication sector, which has loads of prospects to prosper with the growing technology.
Why to invest in the Communication sector in Russia
The communications sector of Russia has become a multi-billion dollar industry, thanks to its growing telecom sector and increasing broadband demand. All these things have made Russia the most favored nation to invest in the communication sector. Let us look on what all are the factors that make Russia the best destinations to invest in when it comes to communication.
- Growing market
First, now that the global financial crisis has withered away it is a good time to invest in the ever increasing and unsaturated Russian telecom market. The Russian communication sector is expected to grow in large-size and is maturing day by day. This is evident from the fact that the mobile phone subscriptions in Russia are on surge.
- Developing technology
Secondly, the telecommunication market in Russia is constant evolving in associated with the rapidly changing technologies. Technologies such as the 3G are already in place in Russia and now the focus is on unified communications and integration of telecommunications with the united system with video and data transmission. Special attention is also given to the IP-telephony technology in which the computer world will intrude the world of telecommunications.
- Growing broadband sector
Apart from the tremendous scope in investing in the telecom market of Russia, there is a large opportunity to invest in the broadband sector. It is estimated that number of Internet users in Russia will be doubled in the coming decade. This phenomenal increase in the use of broadband services will be due to the heavy investments from the government of Russia, who is planning to provide Internet access to every school in Russia. This program by the government will give an opportunity to half of the population to access Internet by the year 2012 whereas the Russia’s IT and communications Ministry is planning to provide access of broadband Internet for as many as 95% of the schools in Russia.
- Increasing customer base
There is been a tremendous surge in the consumer base in Russia and more and more people are joining the bandwagon when it is coming to using mobile phones. This increase in customer base has been fuelled mostly due to the more and more demand for mobile phones from Russian regions outside urban areas such as Moscow and St. Petersburg. There is a huge gap between the urban and rural penetration, which remains unexplored.
To conclude we can say that, the communication sector, in Russia is the second most attractive sector after IT, when it comes to attracting foreign investments. The necessary infrastructure, appropriate government legislations as well as spending all have created a favorable atmosphere conducive to foreign investments.