The Juniper Research Blog

Red Dawn for Russian WiMAX

by Andy Kitson on November 18th, 2008

I know everyone’s raving currently about the new BlackBerry Storm from RIM and how it has the potential to knock the quasi-messianic* iPhone 3G into a cocked hat, but I’d like to draw your attention to the new Max 4G handset from Taiwan’s HTC, which has just been unveiled by its first network partner, the Russian WiMAX operator, Scartel.

The phone, which sports a 3.8-inch 800×480 touchscreen display, a 5-megapixel camera, and a secondary front camera for video calls will operate over the infant WiMAX network being built by Scartel in Moscow and St Petersburg. There’s a short video demonstration of the device on YouTube, showing that the device - which operates on the Windows Mobile OS - can handle TV-based content quite well and has the potential to outperform many rival GSM/WCDMA handsets already on the market. Admittedly, the video is in Russian and we don’t get to see the device in operation in the field, say a Moscow suburb, but it sure looks good and the accompanying bells and whistles will certainly lure some affluent Muscovites away from the nascent 3G services of MegaFon, MTS and VimpelCom. Go on, have a look. I’ll be right here when you get back.

Good, huh?

The key issue here is that the device is also GSM/GPRS/EDGE/WiFi-enabled and will therefore allow users to roam off the Scartel/Yota network when travelling beyond Moscow and St Petersburg, though the operator has yet to identify those network operators with which it has established roaming agreements. Also, there are no details as yet with regards to pricing, so it’s difficult to say how it compares with the likes of MTS and VimpelCom, the latter of which is already selling iPhones to Russian subscribers.

However, Yota will effectively become the first commercial mobile WiMAX service in Russia, beating more established rivals such as Synterra, Comstar UTS, and VimpelCom to the post. Most importantly, though, it promises to deliver very high quality mobile broadband services to customers frustrated with the slow progress being made by fixed-line telephony operators and cable TV operators in delivering quality, affordable broadband services.

We know there is a market for high-end smartphones in Russia - the numbers of illegally imported iPhones speak for themselves, while Sistema-owned SkyLink has been doing brisk business with its high-end EV-DO service in recent years (and aims to enter the GSM market soon), attaining an extraordinary ARPU rate of more than $50 in Moscow alone. But the key to success will be in piggybacking the devices and services onto the GSM networks that stretch the length and breadth of Russia and reach all walks of life from the super-rich to the ordinary citizen.

And, in a country with more than 175 million mobile phone customers generating revenues of approximately $19 billion, that’s a huge potential.