The broadband market in Russia’s largest city Moscow, which has 2.3 million subscribers and valued at over $300 million in 2007, has almost gone through a consolidation phase. The attention of major market players is shifting to Russian regional cities. The Russian broadband market is expected to reach 13 million subscribers by the end of 2008, up more than 100% from 2007.
The holding Multiregion, which acquired more than 20 small broadband operators in Russian regions since its launch in 2004, has bought-out three operators in the Moscow region with 100,000 subscribers for a total of $10 million, according to RBC Daily. The company plans to spend another $60 million to acquire small operators and build its networks in 2008. Its revenues shall grow from $40 million in 2007 to more than $100 million in 2008. To support its investment program, the company intends to sell a stake to a financial investor.
Moscow’s 4th largest broadband telecom operator NETBYNET recently reported that it reached 180,000 subscribers and 1.7 million household passed after an acquisition of Interwave, which operates in the eastern suburbs of Moscow. NETBYNET was estimated to pay up to $10 million or $800 per each of 12,000 Interwave‘s subscriber, according to business daily Kommersant. In 2007, Gazprombank invested $25 million for a 35% stake in NETBYNET.
In February 2008, one of the leading Moscow-based broadband providers Corvette-Telecom with 30,000 subscribers was acquired by National Telecommunications (NTK), which itself was sold to National Media Group for over $1 billion this summer.
In March 2008, Moscow’s largest broadband operator Akado, which is looking to raise up to $400 million for regional expansion, acquired Crossnet with 20,000 subscribers in the western part of Moscow for estimated $10 million or $500 per subscriber. Most of the Moscow-based providers are either testing or offering triple-play services (Internet, IP telephony, and IPTV).