LONDON, February 19 /PRNewswire/ --

For the past decade, the Russian economy has grown at a remarkable pace.
While the country may be facing a slow-down because of the global financial
crisis, at least three key areas in the ICT market continue to look extremely
attractive, spurred by government focus, competitive activity and investor
interest: broadband Internet; triple play; and mobile services (3G).

(Logo: http://www.newscom.com/cgi-bin/prnh/20081117/FSLOGO)

"The fact that ICT is a major theme on the Russian government agenda is a
key driver for the ongoing dynamism in the sector," observes Iwona
Petruczynik, Frost & Sullivan Research Analyst. In 2001, the government
approved three major modernization programs: The Concept of Satellite
Communication Development, by 2010; The Concept of Cellular Mobile
Communication Development in Russia, also by 2010; and, the one divided into
two parts, Electronic Russia for 2002-2010 (eRussia) and the Development of
the Common Education Information Space for 2001-2006 (eEducation). "Clearly,
these programs, which require major investment, are part way through being
implemented and, despite their significant impact to-date, the country still
has a ways to go," adds Petruczynik.

Broadband Internet penetration in Russia stood at less than 10% in 2008.
While the increase is significant from 3.2% in 2007, the country still lags
far behind Western Europe. "There is plenty of catching up to do," says
Petruczynik, "and despite an increase in the price for broadband access,
end-user demand is certainly there. As an indication of the level of demand,
while the number of personal computers per 100 people jumped from 6.4 to 12.2
between 2002 and 2006, the country saw Internet users grow nine-fold over the
same period."

Broadband technologies such as VDSL, HDSL, ADSL2+, and FTTx, provide
great investment opportunities in Russia. Moscow, with 50% broadband Internet
coverage, uses FTTC technology widely. Other regions are also increasing
broadband penetration and are using technologies that include a combination
of FTTB, FTTC, and FTTH technologies to deliver services. The need to enhance
coverage across rural and lower income segments of the population will be
very strong, given the stark contrasts that remain between demographic
segments.

Russia is also continuing to push 3G rollout heavily. MegaFon, Russia's
third biggest mobile service operator, was the first to launch 3G services in
2007 in St. Petersburg and part of the Leningrad region. In June 2008, the
company announced that it would launch 3G in all North Western regions. MTS,
the country's biggest mobile operator, added two more cities to its 3G
network during 2008, aiming to have 40 cities covered by the end of 2009.
Based on the competitive environment and growth potential, we are likely to
see further rollout activity, followed by a period of investment in products
and services to capitalize on the network infrastructure over the next three
years.

TV is another market segment undergoing change in Russia. The Russian
government is now focusing on the analogue-to-digital transition for
terrestrial TV. Investments in this transition will reach an estimated US$12
billion between 2008 and 2015; private investors will provide the bulk of the
funds. The main distribution channels for digital TV are likely to be
broadband subscriber access networks, based on Data over Cable Service
Interface Specification (DOCSIS), ADSL, and Ethernet technologies.

The market opportunities for broadband Internet, 3G and Digital TV are
significant; it is likely that Russia will see an upsurge in demand for
Triple and Quad Play services as a result. "However, when looking at Russia
in terms of technology advancements, it is impossible to disregard the
disparity between Moscow, other major cities and the country's rural areas,"
notes Petruczynik, and adds: "Russia's 'Digital Divide' creates enormous
opportunities for new entrants in the less well-developed regions,
particularly given that competition in the major cities is already intense
and costly. However, service providers will need to understand how to align
to a different set of economic parameters to serve this market in a
profitable, yet affordable manner. Russian service providers would do well to
look for best practices from comparable markets, for example in South-East
Asia and Latin America."

If you would like to know more about growth opportunities in ICT sector
in Russia, please send an email to Joanna Lewandowska, Corporate
Communications, at Joanna.lewandowska@frost.com with your full name, company
name, title, telephone number, company e-mail address, company website, city,
state and country. Upon receipt of the above information, the information
will be sent to you by e-mail.

GIL 2009 Europe

Frost & Sullivan has expanded its flagship Global Congress on Corporate
Growth - GIL Global - into several major cities around the world including
London. For the first time ever in Europe, Frost & Sullivan will be hosting
the Growth, Innovation and Leadership Congress 'GIL 2009: Europe' on 19-20
May, at the Sofitel St James in London. GIL Global is the industry's only
event designed to support senior executives in their efforts to achieve
sustainable, top-line growth. To register, obtain a programme agenda, explore
sponsorship opportunities, or attend as a member of the media for GIL 2009:
Europe, please contact Joanna Lewandowska, Corporate Communications for Frost
& Sullivan in Europe, at Joanna.lewandowska@frost.com. One-on-One interviews
with Frost & Sullivan senior growth consultants are also being scheduled. For
more information you can also visit http://www.gil-global.com.

Frost & Sullivan, the Growth Partnership Company, enables clients to
accelerate growth and achieve best in class positions in growth, innovation
and leadership. The company's Growth Partnership Service provides the CEO and
the CEO's Growth Team with disciplined research and best practice models to
drive the generation, evaluation and implementation of powerful growth
strategies. Frost & Sullivan leverages over 45 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 31 offices on six continents. To join our Growth Partnership,
please visit http://www.frost.com.

CONTACT:
    Joanna Lewandowska
    Corporate Communications
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com
    http://www.frost.com