The Russian ISP market is the largest but least developed among the Central and Eastern European states. According to the latest surveys, as many as three-quarters of Russian adults do not use the internet at all. Moreover, the share of internet users who access the web every day is still low.
The Russian market for internet service provision (ISP) stands out from those of the other Central and Eastern European (CEE) states. Definitely the largest, both in value and number of internet users, it is at the same time the least developed. Nonetheless, with a 142-million strong population, it has significant growth potential.
One of the determinants for market development is computer ownership. In this respect, the country is not very advanced. According to research conducted by the Levada Center, a public opinion pollster, in September 2006, 22% of Russian households had a PC. This is twice less than in Estonia, where, based on the European Commission’s data at the end of 2005, some 45% of households had a PC. It is also less than most countries of the region, including the Czech Republic, Poland and Croatia which stand out in the region with the highest PC penetration rates. In fact, in the CEE region only in Bulgaria and Turkey is the indicator lower than in Russia, of several per cent. To note, all CEE countries had a lower computer ownership ratio than the EU-15 average of 54%.
An interesting finding emerging from the European Union report is that in the countries that joined the EU in May 2004, computer saturation varies significantly among rural, urban and metropolitan areas. Given an average PC penetration of 40% for these countries, in rural areas this indicator is 34% and 50% for metropolitan areas. Meanwhile in the EU-15, the rates are comparable: in rural areas 54% and in metropolitan areas 55% of households own a computer.
In the case of Russia, the average result should in fact be viewed more like a rough estimate than a precise reflection of the overall situation. This is because the country is far from homogeneous and there are huge differences in the economic condition of the largest cities (Moscow and St. Petersburg) and smaller towns and rural areas. In Moscow, the disposable income of the population is definitely the highest. This, in turn, has an effect on the number of PCs in an average household. According to the same source, a third of Moscow households had a computer in September 2006, which is 11 p.p. more than the national average.
Computer penetration rate remains low in Russia, nevertheless, it is continuously increasing. Based on the Levada Center data, the share of PC-equipped households in Russia has gone up more than fourfold over the past five years, from a mere 5% in 2001. In Moscow, this trend has been shaky in some periods (the data reflects very surprising fluctuations between 2003 and 2006), but overall the rate is upward bound.
Another aspect of market development is frequency of computer use. According to the same source, as many as 71% of adult Russians claim to have never used a PC, either at home or at work or elsewhere. On a positive note, over the past five years, this group has been steadily shrinking; in 2001, 85% of Russians did not use a computer at all.
According to the same source, 18% of Russians can be regarded as heavy PC users, i.e. they use a computer every day or almost every day. Another 5% turn their computer on once a week, and 3% do so two or three times a month.
Moscow again stands above the national average. The share of those who do not use computers is smaller (60%), while the percentage of heavy users is much higher (30%).
The low PC penetration rate has a bearing on the ISP market. Internet penetration in Russia is among the lowest in the CEE region. According to a survey conducted by VCIOM, a research agency, at the end of September more than three quarters of adult Russians had never surfed the web. To compare, in Poland around 62% of the 15+ population does not have internet access.
Russians do not appear to heavily rely on the internet. Only 5% of the adult population, or a fifth of internet users, accesses the web every day or almost every day. Another 8% of the population (35% of users) does so a couple times a week. To compare, in the Czech Republic, according to the Central Statistics Office, at the beginning of this year 30% of internet users in the 15+ age group used the internet every day or nearly every day. This share is much higher in Poland, where 60% of internet users access the web every day or almost every day.
Worthy of note, internet use is correlated with educational level. Not surprisingly, the highest web-surfing ratio was noted among people of higher education. In this group, 36% of Russia’s citizens can be regarded as regular internet users, accessing the web at least a few times a month. To compare, for people who have only finished elementary education, the figure is a mere 7%.
In the same survey, Russians were asked what is their preferred source of information. The most popular were national television (85%), newspapers (31%) and radio (26%). Internet turned out to be a relatively less popular media for sourcing information; aside from the abovementioned it also tailed behind regional television and newspapers. In all, 13% of adult Russians said they usually access the internet to find information. The internet was more popular among Moscow and St. Petersburg citizens (26%) and those from cities with 100,000-500,000 and above 500,000 inhabitants (18% and 16% respectively). In rural areas, it was listed by only 7% of respondents.
Worthy of note, only 2% of Russians regarded the “international media” as a popular source of information.
Additionally, according to the survey findings, the higher a respondent’s income the more likely he is to access the internet to gain information about the situation in Russia and the world. Among internet users with an average income of more than RUB 5,000, this opinion was voiced by more than half of the respondents. Meanwhile, only 19% of those with the lowest income (less than RUB 1500) said the same.
The Levada Center has conducted the survey since 2001. In the latest, September 2006 survey, 2,400 people were polled. The margin of error is 3% for all of Russia and 7% for Moscow.
In the VCIOM survey 1,600 respondents aged 18+ were polled in 153 regions and constituent republics on 30 September and 1 October. The surveys were conducted in the form of face-to-face interviews. The margin of error is less than 3.4%.
TNS OBOP conducted its survey of European households in December 2005-January 2006. A total of 30,000 respondents aged 15+ were canvassed in 29 European countries. The data was published by the European Commission in July 2006.