Russia's mobile economy at 4% of GDP to outgrow agriculture, insurance

Russia's mobile economy at 4% of GDP to outgrow agriculture, insurance
Russia's mobile economy is bigger than hospitality sector
By Vadim Dumes in Paris September 25, 2017

The contribution of mobile economy to Russia's GDP was RUB3.2 trillion or 3.8% of GDP, Vedomosti daily said on September 25 citing a report by Russian Association of Electronic Communication (RAEC), OC&C researcher, and Google.

This is already on par with such sectors of the economy as water and gas utilities (3.1% of GDP), education (2.6%), accommodation and catering (0.8% of GDP). Report authors argue that by 2021 the mobile economy contribution to the GDP will grow to 4.7%, beating such major industries and agriculture and insurance. 

The mobile economy is defined in the report as all services based on mobile telephony and mobile data, including traditional telecom services, applications, and online commerce.

The share of the telecom and internet providers in the segment is high at 65%, but is projected to decline to about 58% by 2021. Mobile penetration in Russia is estimated at 178%, while mobile users are active in various application-based services, commerce, and social media.

While mobile data traffic is 10 times cheaper in Russia than in the US and three times cheaper than in Germany, Russia is the fifth country in the world in terms of applications downloaded.

In the meantime in 2016 alone about 1.2mn people were employed in the mobile industry, with another 0.43mn jobs to be created in the segment in the next five years.

Previously Russian internet services major Yandex clashed with Google that began to beat the local company through better penetration on mobile devices. After a lengthy lawsuit Google had to comply with the ruling of Russia's anti-monopoly watchdog forcing it to unbundle its services on Android devices.

According to another study by the Russian Post and the Association of Internet Trade Companies (AITC), Russia's e-commerce market grew by 22% year-on-year to RUB498bn ($8.6bn) in January-June 2017.

AITC believes the e-commerce market will top RUB1.1 trillion ($19.1bn) by the end of 2017. The share of cross-border trade online free of tax amounted to RUB178bn or 35.7% of total market. Out of that, the shipments of Russian Post (Pochta Rossii) accounted for 67.5%.

 

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